"Holding the Virtual Annual Meeting: Factors to Consider and Practice Pointers"

Tuesday, September 14, 2010

With more companies either conducting their annual meetings solely online - or holding hybrid meetings that are both online and in a physical location - many are wondering what is involved and what issues they should consider before raising the topic internally. Join these experts who are the pioneers that have been through the virtual or hybrid experience already:

Cathy Conlon, Vice President, Strategic Development, Broadridge
Carl Hagberg, Independent Inspector of Elections and Editor of The Shareholder Service Optimizer
Cary Klafter, Vice President, Legal & Government Affairs, and Corporate Secretary, Intel Corp.
Lisa Beth Lentini, Senior Corporate Counsel, Best Buy
Scott McMillen, Vice President & Senior Corporate Counsel, The Charles Schwab Corporation

Types of Virtual Annual Meetings
Mechanics of Virtual Annual Meetings
Experiences with Hybrid Annual Meetings

Broc Romanek, Editor, TheCorporateCounsel.net: Welcome to today's webcast, "Holding the Virtual Annual Meeting: Factors to Consider and Practice Pointers."

Without further ado, let me go ahead and introduce the panel for today. Many of these people are my good friends. I always love to do webcasts where I know the speakers so well.

This is a topic that I've been following before I was an online personality. It's something that I was dealing with at the SEC back in the mid 1990's, before there had even been any virtual annual meetings. There were a few in the early 2000's, and there's been a growing trend of companies holding these types of meetings. There number of companies that have done these meetings is still small, but there have been enough of them to have this webcast, particularly because they included some large notable companies. So I thought it was a good time to put this program together, before the proxy season really gets underway.

Cathy Conlon is Vice President, Strategic Development at Broadridge. Carl Hagberg is an independent inspector of elections as well as the Editor of The Shareholder Service Optimizer; he is our "go-to" person on these sorts of proxy season issues. Lisa Beth Lentini is Senior Corporate Counsel at Best Buy and a former member of the SEC's CorpFin Staff. Scott McMillen is Vice President & Senior Corporate Counsel of Charles Schwab. And Doug Stewart is Senior Attorney at Intel.

We're going to start it off with Carl talking about the terminology, and what the different alternatives are, and then we'll go from there. Carl?

Types of Virtual Annual Meetings

Carl Hagberg, Independent Inspector ff Elections and Editor of The Shareholder Service Optimizer: Thanks, Broc. You, like me, are a bit of a history buff. Two weeks ago, I realized with a shock that the first virtual meeting that I'm aware of goes back about 15 or 16 years, to when Pfizer used to broadcast live audio and visual of their annual meeting all around the globe using satellite technology. They wanted to expose their meeting to their employees and associates. In those days an annual meeting was quite a big deal. So I was kind of shocked when I realized how far back this practice actually went. About three or four years, ago quite a few states began changing their corporate codes to allow meetings to take place only in cyberspace, as a little nod to modern technology.

I thought I'd start by going through a taxonomy of virtual meetings. There are about five or six different kinds that I can see here. As we go through the alternatives, we want to be asking ourselves two questions: Does this alternative provide better service to investors, and is it more cost effective? At the end of the day, I think that's what every corporate person needs to think about.

We'll start with the virtual-only meeting, that is, a meeting that is held only in cyberspace. In that situation, the shareholders have no ability to attend in person. Because it's an annual meeting, shareholders must be given the ability to cast their votes between the time the polls are officially opened and officially closed. I believe they also must be given real-time ability to ask questions on matters before the meeting, within reasonable parameters. This, to me, is the ultimate goal - a meeting you would have only in cyberspace. No hotel, no coffee pot, no nothing - just virtual reality.

The second alternative, which has been the more common one but still not all that common, is what I would call a "hybrid" virtual meeting. This is a meeting that is held in cyberspace but is held in real space too. In a hybrid meeting, shareholders with the proper credentials can attend and can vote in person if they want to do so. And here's something, Broc, I think I may have gotten from one of your blogs - In Maryland, when they enacted a new law permitted virtual meetings, they included a provision that if even one shareholder asked to attend a meeting in person, the company would need to designate a physical place for that person to come and be part of the meeting. So that's a hybrid meeting.

There's a third variety - I think Schwab is probably an example of this - which is a hybrid meeting with limited virtual voting ability. In this type of meeting, if you're a registered holder and you have a PIN, you can log on and vote in person. If you're a street name holder and you've pre-registered and gotten a PIN, you can vote during the meeting. Other people have to vote the old fashioned way. So that's the hybrid meeting with limited or no virtual voting.

Then there's the type of meeting we're all most familiar with - a virtual meeting where there is real-time audio and a real-time video broadcast, but no voting ability. I think this is a pretty good alternative for companies that just want to get more people to see what they are about and to attend their meeting.

Then there's the virtual meeting - and maybe this is the most common type of all - with audio feed only. I must say I hate this model. Most annual meetings are like watching paint dry to begin with. When you only have audio feed and maybe some PowerPoints, it's like watching paint that dried last week and you wonder why you're doing this. That's the virtual meeting with audio only.

Last but not least is the archived virtual meeting. A steadily growing number of people are recording the audio and visual of their meeting, and then putting it up on their website for anyone who wants to view it later.

So that's the taxonomy of virtual meetings. I'm going to turn it over to Cathy Conlon, who's going to talk a little bit about the mechanics of virtual annual meetings.

Mechanics of Virtual Annual Meetings

Cathy Conlon, Vice President, Broadridge: Thanks, Carl. My goal is to talk about what we've done for some of our clients on our platform and give you some of the questions that we have gotten from clients as we talk to them about this process. Since we rolled out our virtual shareholder meeting platform in May 2009, we have hosted 22 virtual meetings for our clients, and that includes Broadridge's own virtual meeting.

As Carl mentioned, the company has the option of having an audio-only event or having a live video feed for their meetings. The company also determines whether they want to do a hybrid meeting or a virtual-only meetings. Of the 22 meetings we have done so far, 13, or slightly more than half, were virtual-only. And of the 22, 17 were the audio-only events that Carl doesn't like so much, versus five video events. For those of you who want to take a look at what the different meetings look like, we have a website, virtualshareholdermeeting.com, which has links to all the replays of the meetings that we have hosted. It also has a list of upcoming meetings. Feel free to take a look on our website at the different options that we're talking about here.

For clients that want to conduct a virtual meeting on our platform, we build web pages where the meeting takes place. Specifically, there are two pages, the login page and the meeting page. Those pages have the look and feel of the client's website - the colors and logos and things like that - so they look like the client's own website to some extent. The login page, which you can think of as the door to the meeting room, is where the shareholder goes to get validated. From there, if they are a valid shareholder, they go on to the meeting page. Once they are on the meeting page, the shareholders can watch the proceedings of the meeting, ask their questions and vote their shares.

We develop these pages, and then we give the client the URL that they can use to direct their shareholders who want to attend. So if it's a virtual-only meeting, in the company's proxy materials there will be some www.address which will be the location of the meeting. With a hybrid meeting, there will be both a physical and a virtual location.

The other option the company has is to direct their shareholders to their own websites. Many of our clients do this. They will direct their shareholders to their own web pages, and then they link them through to the login page.

Most of the companies that we posted virtual shareholder meetings for have also allowed non-shareholders to attend the meeting, but in listen-only mode. What that essentially means is that the company is offering a webcast of the meeting simultaneous with the actual meeting.

Among the most frequently asked questions we get are: How do we validate those shareholders, and how do we allow them to vote? Another voting question we always get is: Can all shareholders vote on our platform?

The answer to the first question is that the shareholder is validated with their control number. The control number is unique ID that is already sent out to the shareholders with their proxy materials. The answer to the second question is yes - on our platform we can validate all shareholders. It doesn't matter if they're registered or beneficial, we will validate them and allow them in to vote their shares, and there's no risk of multiple votes.

This question comes up a lot: Can a shareholder vote over and over again? The answer is yes, but the only vote that counts is the last vote. Even if a shareholder has previously voted in any format, by sending in their VIF or voting on proxyvote.com for example, if they come to the meeting and vote their shares, we will override the other vote that they already placed.

Another big concern companies have is how they are going to handle the questions that come in to the meeting. How are shareholders going to ask them, and how is the company going to monitor what's being asked?

The company has a few choices on how they incorporate the questions into their meeting. Companies can collect questions in advance of the meeting using our shareholder forum platform, which works in conjunction with the virtual meeting platform and allows companies to collect pre-meeting questions. That's one option.

The second option is to allow shareholders who have logged in and been validated, and who are sitting at the meeting page, to type in their questions right on the meeting page. Behind the scenes, someone from the company is monitoring all the questions that are being submitted.

There's a third option - companies can have a telephone bridge and take those questions verbally. That means that, in addition to the webcast, at the Q&A time they'll open up the phone lines for people to ask questions. So those are a few different options for how questions are handled on the virtual platform.

A telephone bridge can also be used to enable directors and presenters who may not be in the same location as the meeting to participate in the meeting virtually. We have had several clients use a telephone bridge for that purpose. A telephone bridge is also a way that a shareholder proposal could be read into a meeting. The shareholder proponent can join the phone bridge, and at the appropriate time be given the opportunity to read the proposal to the meeting. So the telephone bridge can be a very handy tool for the meeting.

Many clients want to know under what circumstances may a virtual-only meeting format be used, and when is it more appropriate to do a hybrid meeting? I think this is a very important question and one we've heard a lot about.

When we speak with institutional investors, there are those who say that if there are no governance issues at the company and there are no shareholder proposals or contentious issues, then virtual-only meetings are probably OK. But there are others in the industry who believe that virtual-only meetings are a bad thing for shareholders, because those meetings take away a shareholder's right to face management. I think there is something to be said on both sides.

In my practical experience, for many companies, especially smaller companies, there are economic and logistical considerations in deciding to go virtual-only, where for budgetary or logistical reasons they have to choose to either an in-person or a virtual meeting. In the case here you don't have the option of having both formats - which I agree is the ideal option for shareholders - which method allows for more participation? I would argue that it would be virtual-only, because I think technology in this case is a great enabler.

Most shareholders do not have the ability to attend the company's meeting, especially if you consider the geographical hurdles. Obviously, a virtual-only meeting dispenses with that problem.

The company has to also commit to doing the right thing, and they can more easily do that for the vast majority of their shareholders in a virtual setting - for example, having phone lines for receiving questions, committing to answer all the questions, and perhaps showing the questions to everyone in attendance. That's actually a functionality we're planning to add to our platform - the ability for all questions to be seen by the whole audience, so that a company cannot hide behind the technology (which is one of the concerns we hear a lot). Another option is posting all of the questions and answers after the meeting. I think there are some things to be said for the hybrid approach if you can do it, but there's also something to be said for considering a virtual-only approach when there is no other option.

Those are my comments. I'll turn it back over to Broc.

Experiences with Hybrid Annual Meetings

Romanek: Thanks, Cathy. Now we're going to have some of the members on our panel who have actually experienced hybrid annual meetings (I guess all of them, except for Broadridge) explain to us what it was like, any lessons learned, and things of that nature. We'll kick it off with Doug at Intel.

Doug Stewart, Senior Attorney, Intel: Thanks, Broc. We've been doing a hybrid meeting for two years now. I fondly recall my discussions with Cathy as we developed the platform together, which served as a sounding board for the kind of features and kind of setup we wanted like to see. Those were great discussions.

I think the dawning moment for us came about three years ago. We had rented a big convention hall for our meeting, and just over 100 people attended. We were spending hundreds of thousands of dollars on this meeting, for everything from security to production crew to you name it, and the economics just didn't make sense for us to keep doing that. What we've been doing now is holding the physical part of the meeting on our campus and then having the virtual meeting going out to everyone.

From a messaging perspective, we didn't want this to be seen as taking anything away from the stockholders. We wanted people to feel that this was an improvement over their existing experience. So in addition to having the virtual meeting where people can vote at the meeting online, as well as ask questions of management, we also have a stockholder forum, which we developed with Broadridge, and where we get questions year-round. Just by comparison, we got 17 questions at last year's meeting from online services during the meeting, but we had over a 100 questions in advance of the meeting through the forum that we committed to answering. So the forum essentially expanded the Q&A period from just the hour of the meeting to at least a month prior to the meeting, as we were gearing up for it.

In terms of how the meeting operated, I think people who were there would agree that it went fairly smoothly. There were no technology hiccups. The video feed worked fine. People were able to log in. We had nearly 100 stockholders log in and attend the meeting, as well as another 50 or so non-stockholders, or people who didn't have their credentials - anybody who was just curious about how the meeting would operate.

We had 21 different stockholders vote at the meeting representing about 130,000 shares - still a small number, but not insignificant. I think that would compare favorably to the number of votes and shares being voted at our meetings in the past. But one of the things that did happen is that our in-person attendance has really gone down. Last year, only about 30 people showed up at the physical meeting. People are just not going to physical meetings as much as they have in the past. There are probably a lot of good reasons for that, everything from Reg FD to people just being more used with video-on-demand, accessed from the comfort of their homes.

We've tried to move to the virtual-only meeting. We want to keep getting cost savings by eliminating the physical portion of the meeting. We've refrained because we have heard a couple of complaints that people want to make sure that there is procedural fairness, and that stockholders should still have the ability to confront management. We are more than happy to engage with stockholders who have concerns to try to figure out how to design a system that everybody can feel comfortable with, whether it's having all the questions and answers available and posted, having stockholder proponents invited to the meetings so they can present their proposals on an equal footing with management and be on the same camera, etc.

These are the sorts of processes and procedures that need to be worked out before virtual meetings get accepted by everyone. We're doing our part to listen and to take all the good recommendations we can to make this more sustaining and a system people can believe in.

That's pretty much the Intel experience to date.

Romanek: Doug, let me ask you a question or two. You said you got 100 questions before the meeting. How did the responses work internally? Were all the questions answered during the meeting? My guess is not, but if not, then what was the process to determine which questions would be answered? Were the questions that weren't addressed during the annual meeting answered elsewhere?

Stewart: Every year, in preparing for the annual meetings, we go through a process of pulling together people internally who have knowledge of various hot topics or issues, everything from executive compensation to conflict minerals and other social responsibility-type concerns. We put together briefing books so that we have our answers and know how we're going to respond.

The stockholder forum was actually a very helpful tool in that process. Since we got some of the questions in advance, we could group them together and prepare coherent answers. So we'd get, say, a one or two dozen questions about executive compensation. Rather than answering each one at the meeting, we would group them together and have an executive compensation answer to hit all of the main concerns that were raised in the questions. So that's what we did at the meeting.

Following the meeting, every individual question was answered. The responses were sent just to the questioners. We haven't posted all the answers on the forum as of yet. There have been some discussions about whether we ought to or not, but at this point, that's where we are.

Romanek: Great, thanks. Lisa Beth?

Lisa Beth Lentini, Senior Corporate Counsel, Best Buy: I work for Best Buy, and this was our first year doing a hybrid meeting. We looked at the virtual component of the meeting as a communications vehicle to enhance the experience of our shareholders, our employees, other stakeholders and customers, and also as an opportunity to explain the company's brand proposition in a very real way.

Best Buy's current brand proposition strategy is the "connected world," which is the concept that Best Buy can bring the technology which can empower folks to connect to the content networks and people that they care about most - anytime, anywhere, on any device. We looked at the virtual shareholder meeting concept and said, "What better way to show the art of possibility in the connected world than to add this virtual component and additional communication features to our own shareholder meeting?" It allowed us to show some of the amazing capabilities that are out there and how they can be used in a practical and real way.

In addition to having the validated shareholder website, which you've heard about, we provided live streaming of our meeting on our news website, http://www.bby.com/. This allowed shareholders who didn't want to be in a validated forum and just wanted to stream the meeting the opportunity to do that. It gave the media, our employees and all sorts of other stakeholders, including our customers, the ability to see our meeting.

For some reason, a lot of annual meetings of shareholders seem to be shrouded in mystery. We thought it would be great for there to be open access and transparency so that there wasn't this cloud of mystery about what happens during these meetings. Anybody can see it, and it's not anything that is particularly mysterious or difficult to understand. We also knew that a lot of people didn't want to make the trek out to Richfield, Minnesota, no matter how beautiful Richfield is. We thought that this was going to be an easier and a more cost-effective way for people to be able to really engage.

We did a few things that were special for our shareholder meeting. We created video biographies of our executive officers and our chairman of the board, who also happens to be the founder of the company. With all the changes that are coming up in the corporate governance landscape and the executive compensation landscape, we thought it would be worthwhile for shareholders to have a positive introduction to our executive officers and our chairman.

The levels of trust in corporate America right now are at an all time low, which I think most people are aware of. I personally believe that, while it's really easy to vilify a faceless corporation, it's much harder when you have real people that our shareholders can feel a connection with. We thought these video biographies were a much more tangible way for people to feel like they knew our executive officers, and that they were much more real than a very stale written biography with either a black-and-white or color picture. So we created these highly stylized, extremely branded, short (90-second) video bio introductions for each of these key players and we put them on the shareholder forum, which was the validated site, on our investor relations page, and on YouTube. So anyone could see them at any time.

We also had video attendance by a director. We think we're one of the first companies to have a director attend a meeting virtually during our virtual shareholder meeting. One of our directors had an executive meeting for his company on the East Coast on the same day as our shareholder meeting. Our governance principles set expectations of attendance for each director at our shareholder meeting. So using technology, this director was able to attend the meeting virtually through a video conferencing connection. We used Best Buy products, including a large Insignia television, so that all of our shareholders could see the "connected world" come to life, and realize some of the benefits of having virtual technology in everyday life.

Finally, we used social media extensively during our meeting. Obviously we had the virtual shareholder meeting going on. We had people tweeting from the meeting, videos on YouTube and live streaming on our website, so that people could have a lot of access to the meeting and could very transparently see what we were doing.

Romanek: You mentioned someone tweeting. But did you have someone monitoring the online activity outside of your annual meeting page, just to see what the people were saying about you?

Lentini: We always have people that are monitoring what's being said about Best Buy, both on Twitter and on other blogging sites, because Best Buy is highly branded and we sell technology. People are always saying things, so we had a lot of folks looking to see whether there was positive feedback, negative feedback or questions. For the most part, there was a lot of positive feedback and really not any negative feedback that we were able to identify. And people didn't seem to have a lot of questions.

We had only two items on the agenda - the election of directors and the ratification of auditors. So there wasn't anything particularly controversial. But the virtual side of our shareholder meeting saw participation increase dramatically - twice as many people logged in on our virtual site as were in attendance at the meeting.

We had a satellite feed, and we were a little nervous about whether this would work or not, so we had a lot of backup systems. I don't think we'd do that in the future, because everything went seamlessly. I think that with our first experience, it was good to have the backup capabilities, but we feel comfortable at this point that we've got a good plan going forward.

Romanek: Great, thanks. Scott?

Scott McMillen, Vice President, Charles Schwab: Thanks, Broc. Like Best Buy, this year was the first year that we did a hybrid annual meeting, where we offered both a physical and a virtual annual meeting. I think we disagree with Carl's comment that what we did had "limited" voting. What we set out to do was different than what Best Buy and Intel did, in that we developed our own virtual meeting. What we tried to do was mirror our physical meeting to the extent that we could.

Our process was somewhat evolutionary. We did look at prepackaged solutions like the Broadridge System for virtual meetings, which we thought was very impressive. But then we looked at what was important to us in conducting a virtual meeting, and the communications piece was one of our primary concerns. We worked very closely internally with our corporate communications department, which had developed a virtual meeting capability. We thought that we could be best served by using our own virtual meeting platform, because we wanted to make it look like a company event - I think many companies are doing that now. With respect to the annual meeting, we started thinking about the things that we hadn't previously offered, including the ability to ask a question and to vote.

We have been webcasting our meetings for a number of years. Like Intel, we had seen a drop off in the number of participants at the physical meetings. In 2000, we had upwards of 700 people attending our annual meeting; it's dropped off to below 200 people at the physical meeting. So we had started thinking over the prior year about how could we reach out, perhaps promote our annual meeting more and give more people the opportunity to participate.

Cathy, I think, talked about reaching out geographically, and that the virtual meeting is a very neat way to do that. Given that about half the people who participate in our annual meetings are employees, many of whom are located across the country, we thought it would be really nice to extend the annual meeting functionality where we would offer, in addition to the webcast, the ability to ask a question and to vote as well.

When we started looking at our own capabilities and came to the conclusion that we wanted to make it more like a company event, using our own virtual meeting platform, then we had to think more deeply about how we could offer the capability of participating in the meeting as though you were a shareholder. We decided at least for this year, in 2010, that to the extent possible we would just mirror everything that we do at the annual meeting. So we set up a registration very similar to what you would do at the physical event, where you pre-register. We've always done that in advance of the meeting, and for a number of years we had offered that capability online. So for our virtual meeting, you would go online and register just as you would for the in-person annual meeting. We, like Best Buy and Intel, also wanted to offer a webcast, so if you weren't pre-registered or did not want to register or were not a shareholder, you would have the ability to see the webcast. But registering for our annual meeting permitted you to access the area that had the full functionality.

The voting piece, we decided to do, again, just by mirroring the annual meeting. We already at the annual meeting have a ballot that we pass out to shareholders who raise their hand and want to vote. For the virtual meeting, we decided to mirror that. So we had the same ballot, and during the time when the polls were open, a shareholder who was registered would have the opportunity to fill out the ballot, just as you would at the physical meeting, and submit it. The ballot went into a secure data file, which was submitted to our transfer agent, who then authenticated the vote in the same manner as they would at a physical meeting.

So that's how we treated the voting aspect of the annual meeting. We didn't have the Broadridge solution, where shareholders are actually dialing in to the polls, but we had a ballot system that was the same as you would get at the physical meeting.

For the webcast annual meeting, we used to get about a dozen people who would view the annual meeting externally, plus about 50 employees. In 2010 we doubled those numbers. We had about two dozen people who were registered at the virtual meeting - there was just a handful who viewed the webcast who were not registered. Internally, we had about 100 employees who participated in the virtual meeting. At our physical meeting, our statistics there were similar to the prior year. We had about 150 people who were actually present at the physical meeting. So we had about the same number of people at the physical and online meetings - about 125 participants in the virtual meeting and about 150 people at the physical meeting.

When we set out to do the virtual meeting, one of our concerns was that voting was going to be a big deal, especially since we were focused on the communications piece of the annual meeting. Normally, at annual meetings, when we pass out the ballot, we get anywhere from zero to three back. We wondered how many we would get at a virtual meeting. Again, the statistics there were underwhelming - we had six votes come back at our virtual meeting. We didn't see any dramatic increase from what we were typically seeing at our physical meeting, at least with respect to the voting piece.

With respect to lessons learned, one of the things that we had been most concerned about was whether we could do it ourselves and develop something using our own virtual meeting platform. It turned out to be a lot simpler than we thought. At most virtual meetings that companies conduct, there is already the capability to ask questions, and often there are ballot capabilities as well. Adding the voting piece was not too difficult to do at the virtual meeting.

The other lesson learned is that a virtual annual meeting really can increase your outreach. Because this year was somewhat experimental, we did not set out to promote the virtual component of our meeting. But we noticed from the people who were signed up that it really did expand our geographic reach.

Almost all the people who registered externally were from locations outside of San Francisco, where we hold our physical meeting. It was nice to have that extra reach, and it was also nice from an employee relations standpoint to be able to offer that participation across the country, where previously we only had the ability for a webcast. It felt, both to employees and to our shareholders, that they could really participate in the full annual meeting. So our experience was very positive.

Romanek: Carl is always saying "Don't forget the employee shareholders." I think that's a great point to make, Scott.

Broadridge itself had a virtual annual meeting. Cathy can speak to that.

Conlon: We had a virtual meeting this year, our first time obviously, since we're a fairly new company. We spun off from ADP a few years ago, so we haven't had a lot of experience with our own annual meeting. We have held a couple of meetings in our corporate headquarters in a conference room that did not get much attendance, and the annual meeting was a fairly routine event for us. Clearly we wanted to use our own platform to show the capabilities, and we were very happy with the results.

We had 184 attendees at our virtual meeting this year, which we thought was a phenomenal number, especially in comparison to the handful we had the prior years. Out attendance was divided about half and half in terms of shareholders and non-shareholders. In terms of employee participation, we had set up conference rooms throughout our locations to show the meeting, so that our people could get a sense of the platform and get a feel for what we were doing.

We had about 15 people logged in directly, but we had a lot of people watching in conference rooms, so we had very good shareholder attendance in terms of participating in the meeting this year. We had 22 votes come in at our meeting, representing a small number of shares.

We had a shareholder forum to collect pre-meeting questions, and we also did a survey of our shareholders. We had about 100 people participate on that forum and we got quite a few of the surveys back. We had eight questions before the meeting, and at the meeting we got 12 questions. We committed to answering all the questions that came in, and we did so. Our chairman and our CEO went back and forth and answered them all.

The feedback we got from our chairman after the meeting was, "I think it's good, I loved how it went, and it was a very successful event for us. However, nobody knows for sure that we answered all those questions." He felt that there needed to be more transparency in the process in terms of showing those questions. That's one of the reasons I mentioned before that we're looking to add functionality to our platform that would allow a company to show all the questions as they're being submitted. We thought that was a very good suggestion, which answers some of the concerns in the industry.

Just as an aside, we actually had a call center set up for our shareholders who were having difficulty in any way, whether they had questions or whatever. We've done this for other clients as well. There is concern, since this is fairly new technology, so we set up a shareholder support line. We got a handful of questions, mostly about where the control number was, so people needed just to identify where they could find that piece of information. That's consistent with the other companies that we've done that for.

So I would say overall we thought that the results were extremely positive from the feedback we received. We were clearly happy with the results, and fortunately our senior management was very happy with them as well.

Romanek: Great. Well, I never heard Carl so quiet, so I know he must be chewing off his leg somewhere.

Hagberg: No, this is really a fascinating discussion. I did want to clarify something that I said about the audio feed only, and maybe this is a way of looking at the issue in general.

Broadridge expects almost 14,000 annual and special meetings to take place this year. That's a lot of meetings, and that's a lot of money and preparation going into those meetings. And at all but a few hundred of those meetings, nothing really happens. The meeting takes place, it takes less than five minutes to conclude, and there's nothing controversial. So there is really tremendous saving potential with virtual-only meetings, for companies where there's nothing terribly exciting happening. But of course, you have to give people a fair chance to be heard.

I think Warner Music still probably has their meeting posted. It took 10 minutes. It was strictly business - they were just transacting the ordinary business of an ordinary annual meeting, and it was over in 10 minutes. I think Edgar Bronfman was disappointed that there were no questions, but there was really nothing to ask. So for the vast majority of companies there is a tremendous amount to be said for having meetings only in cyberspace. Would I as a stockholder want to see a fancy video camera and fancy production values? No. I would like to see this done lean and mean and nice.

On the other hand, I think there are still a lot of companies that couldn't have a virtual-only meeting and wouldn't want to. Companies that are shareholder-oriented, that are locally oriented, or that have strong brands, like Best Buy or Charles Schwab, may not want to have a virtual-only meeting and exclude people.

We're seeing a fascinating evolution and really fascinating opportunities to open meetings up to many more people. That's actually been my pet peeve - that annual meetings have in many cases become perfunctory, and they don't really do much for shareholders. I think this is a wonderful way to strike the right balance.

And you don't have to do it the same way every year. Some years you may want to have a big and elaborate disclosure, and other times there's really nothing much and you just want to get the meeting over with as expeditiously and cost effectively as possible.

This webcast has been, for me at least, a fascinating exploration of the different changes you can make on the virtual meeting model.

I want to say one other thing, since I have been so quiet. We do have to keep this in the back of our mind. With 14,000 meetings a year, if we ever get to, say, 5,000 virtual meetings, you can bet your life that someday, somebody will sneak up and engineer a "voting surprise." That's not a reason not to have these meetings. But it is a reason to always be cautious and well prepared for a meeting.

As sure as I'm sitting here, someday somebody is going to pull off a surprise at a virtual-only meeting. But it will probably be 10 years from now.

Romanek: There could be that surprise today in person, but it just doesn't happen that often. You're right, it would be much easier to do online.

Hagberg: It does happen a few times a year in person, but usually when there's a formal proxy fight. Of course, the opposition tries to keep everybody in the dark until the last minute and then tries to fool the management thinking they're winning and then surprise them.

Conlon: We do get asked that question a lot - will I get a lot of votes at the meeting? Nobody wants a big swing in the position that they're surprised by because of the virtual meeting. Because of the way electronic voting works, an institution typically uses a voting platform, whether it's proxyvote.com, which is our platform, or another one, which consolidates their position and votes it. Those votes have to be in prior to the meeting. So just by the nature of those systems, the really big positions are not going to get voted at a virtual meeting. If there was a very large individual shareholder who was not using one of those consolidation platform, it's possible, but I think it's fairly unlikely. I think that the good news for companies is that they don't really have to worry - in the near term, anyway - about a big swing in their vote.

Hagberg: You're absolutely right. This is the remotest of possibilities but eventually it will probably happen.

McMillen: Cathy is right about that. That's something that we considered as well at Schwab, and we came to the same conclusion - that most of the larger positions would be voted before the meeting as they normally are and reflected in the preliminary results. When we thought about the meeting, we thought to the extent that you could mirror something that was happening at the physical meeting, we felt very comfortable with putting that online in a virtual meeting. As Broc said, there could be a surprise at the physical meeting, but if you had the same capabilities and the same functionalities, the concern should not be greater than it currently is.

Romanek: Great. I want to thank everyone for doing this program. It has been very interesting. We really are at the pioneer stage of this, but it's happening and it's real. I think it's an important webcast to have. Hopefully we'll be doing some follow-up program, and hopefully you all will still be doing your virtual meetings and I'll ask you to participate. So thanks very much Scott, Doug, Carl, Lisa Beth and Cathy for joining us today.