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The
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P&G Reconsiders
Online-Only Meetings
Article published on September 13, 2010
By
Kristin Gribben
Procter & Gamble’s board did an about-face when it agreed
last month to continue holding in-person annual shareholder meetings for at
least five more years, rather than experiment with an online-only version.
The decision came about four months after an April 22
8-K filing announced that the board had amended its bylaws to allow
annual meetings to be held “solely by means of communications equipment as
authorized by Ohio law.”
The board’s switch in policy resulted from a shareholder proposal on the
issue. Eight days after the April 8-K filing, Jim Epstein,
the chairman of EFO Capital Management and a descendant of
co-founder James Gamble, sent a letter and submitted a
resolution asking the board to adopt a policy affirming the continuation of
in-person annual meetings in addition to Internet access to the meeting.
After negotiations between the board and Epstein, the two sides reached a
settlement in August. Epstein agreed to withdraw the resolution in exchange
for the company’s agreeing to hold a physical annual meeting for at least
the next five years.
“We strongly support the use of new technologies to make annual meetings
accessible to stakeholders who cannot attend in person.... But we do not
believe that Internet-only meetings should be substituted for traditional
in-person annual meetings.... Face-to-face annual meetings allow for an
unfiltered dialogue between shareholders and management,” the resolution
states.
P&G spokeswoman Jennifer Chelune says that while the board
amended its bylaws, it had no definitive plans to hold an online-only
meeting. “P&G seeks to continue to develop a deep understanding of the role
digital plays in people’s lives. We are interested in interacting with
consumers — and shareholders — in the format in which they want to be
engaged. Increasingly, that’s online,” she writes in an e-mail.
The controversy over electronic-only meetings versus a hybrid option erupted
late last year when Intel announced it would hold an
online-only meeting. It was the largest company at the time to make such an
announcement, although a handful of smaller companies have eliminated their
physical meetings. The move by Intel upset shareholder activists who like to
attend annual meetings to protest or ask management and the board questions
face-to-face.
Like P&G, Intel also agreed to continue holding a physical meeting after
receiving a shareholder resolution (though Intel did not agree to a
five-year moratorium).
Meanwhile, the software company Symantec announced its
Sept. 20 annual meeting will be online-only. Shareholder groups, including
some in the U.K., are organizing a letter-writing campaign urging the board
to rethink its decision and continue with the physical meeting as well.
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