"Annual meeting of shareholders" makes a pretty self-explanatory event title. Yet sometimes, corporate managers seem to forget exactly why those meetings are supposed to take place.
A recent incident at Symantec
When "virtual" isn't entirely beneficial
A virtual, Internet-enabled shareholder meeting sounds like an idea whose time has more than come. Most shareholders have already voted their proxies by the time annual meetings roll around, and many can't physically travel to the meetings for myriad reasons. Virtual meetings could certainly ease some of those logistical constraints, and allow shareholders of all stripes to get more involved.
Unfortunately, Symantec's recent virtual annual meeting did just about everything wrong. According to The New York Times, Symantec's meeting was only broadcast over the Internet; no physical meeting accompanied it. In addition, the company only broadcast audio. Without video, shareholders who decided to "attend" the Internet-only meeting couldn't see who was present, nor receive important visual cues, such as executives' expressions when they answered questions.
Worse still, management addressed only two shareholder questions, and one shareholder complained that his question in the electronic queue went unanswered.
But wait -- it gets even worse. Three of the company's 11 directors weren't there, and Symantec refused to identify which ones skipped. Symantec directors receive roughly $250,000 a year in cash and stock to serve on the company's board. Anyone making that kind of money should probably bother to show up to a virtual meeting, if only for shareholders' sake.
Dramatic doings
Too often, shareholder meetings get short shrift from just about everyone. With the exception of a few popular meetings like Berkshire Hathaway's
Alas, shareholders don't know what they're missing, literally and figuratively. Intriguing developments can often emerge at shareholder meetings, speaking volumes about shareholders' opinions on a company's policies -- and managers' opinions on and attitudes toward shareholders themselves.
Among other companies, Goldman Sachs
Not every meeting will be so dramatic, but they're all no less important. Whether a gadfly is pushing for substantial changes through shareholder proposals, or a slate of directors is up for a vote, shareholders need to know what's going on. More importantly, annual meetings give shareholders a rare opportunity to voice their opinions or concerns on a corporation's conduct.
Truly transparent meetings have no blindfolded
According to poster FreethinkerKW, who discussed Symantec's meeting on our Foolish discussion boards, "If this type of annual meeting were to take root, you can bet criminality on the board would surge dramatically." When no one's bothering to pay attention to a board's behavior, all kinds of bad ends can result. When no one even has the ability to pay attention, things could get even worse.
Shareholders should be alert to any signs of decreasing transparency among corporate boards, and voice their concerns to those companies' investor relations departments. Companies that switch to virtual-only annual meetings, and decide "audio-only" is a 21st-century idea instead of an anachronistic throwback to the golden age of radio, need to realize that such steps only make them look like they have something to hide. (Perhaps they do.)
The option of virtually attending a meeting could be great for shareholders, if that option includes audio and video. That extra effort could help prove that managers and directors respect the folks supplying their companies' capital.
Annual shareholder meetings provide an important opportunity to shed light on corporations' behavior. But if shareholders can't actually see what's going on, they might end up left in the dark.
Check back at Fool.com every Wednesday and Friday for Alyce Lomax's columns on corporate governance.
