The Rise of the Virtual Investor
A few days ago, I wrote about the brouhaha that has erupted over Symantec Corporation’s plan to hold an online-only shareholder meeting on September 20th. The U.S. Proxy Exchange and CorpGov.net have taken exception to Symantec’s plan to hold it’s meeting only on the Internet, suggesting that this effort is an affront to important shareholder rights.
As was noted in its post on the subject, CorpGov.net’s James McRitchie wrote, “[s]ome investors have expressed concerns that virtual-only meetings would deprive them of the opportunity to meet with company representatives face to face. They believe that physical meetings allow investors to better express their positions – and that management and the board listen more closely when communications are made in person.’
If the primary purpose of attending a shareholder meeting is to confront company executives face-to-face and to engage in a bit of verbal jousting, then by all means, fight the good fight and get executives to see the light and stay with in-person meetings. But is that what investors actually want from an annual meeting?
Let’s review the annual meeting process for a moment.
An annual meeting is convened to consider management and shareholder proposals and allow for both company representatives and shareholders to engage in a presentation of views about matters pertaining to the corporation. To suggest that the parties engage in a discussion is a bit of an overstatement as most executives simply try to get through the process as quickly as possible while shareholders either read their proposals that have already been published in the company proxy statement or raise issues of concern to them. The proxy ballots have already been tabulated and the company representatives already know where things lie. On occasion, the meeting becomes a forum for shareholder theater where the wrongs of the company are put on full display. An hour or so later, everybody goes home.
The virtual shareholder meeting is a game changer. What it does is remove the human element from this process. Indeed, it enables wily CEOs to avoid one of the few times they have to go mano-a-mano with the company’s owners. More importantly, it forces investors to develop meaningful strategies for expressing their views and influence the annual meeting process.
As I have noted in a number of previous posts on this subject, the annual meeting process has devolved into a form of Kabuki Theater, a drama in which the outcome is already determined before the play begins. Taking this process off the table forces shareholders to engage in creative forms of engagement, which they have largely failed to do.
Let me suggest a couple of shareholder approaches in a virtual world:
- Social Networking: Facebook and LinkedIn shareholder pages discussing the issues
- Investor Blog: An in-depth discussion of the issues surrounding the annual meeting
- Online Commenting: Make noise as a commenter on other blogs, investor forums and other online publications
- Microblogging: Twitter like hell. Got a quick thought, Tweet it. Find an article of note, put it up.
None of these tasks are easy and they take time and thought. But herein lies the challenge to investors: Do you simply want to rain on the CEO’s parade or do you want to improve the company’s performance and shareholder value? I argue that the virtual meeting is a wake up call for investors to develop substantive strategies for effecting corporate change.
I once asked a fellow law school graduate how he did in school. He replied with great enthusiasm, “I graduated in the top 90% of my class!”
