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The author of the blog copied below, Glyn A. Holton, is the founder of the "Investor Suffrage Movement" and of the "United States Proxy Exchange." For his previously expressed views opposing "pure virtual" shareholder meetings, see |
The New Capitalist (Glyn A. Holton), December 22, 2011 posting
A couple weeks ago, Elizabeth Mozley of Broadridge Financial Solutions (BR) invited me to join a working group to develop best practices for conducting virtual annual meetings. I was torn about participating. On one hand, Broadridge has a too-substantial financial interest in the outcome, as they have a near monopoly on the technology for conducting virtual annual meetings. On the other hand, the membership of the United States Proxy Exchange (USPX) has talked about developing similar best practices for over a year but not gotten around to it. We are a volunteer organization with an agenda subject to the availability and priorities of members. Honestly, we have been distracted with say-on-pay, proxy access and implementing our new website at http://proxyexchange.org. Also, if and when the USPX does develop best practices, we will need to involve other players, including Broadridge.
The two main players in this debate are Broadridge, as the providers of the meeting technology, and the USPX, which has organized opposition over shoddy technology and potential abuses. With her invitation, Elizabeth was offering a forum that would have us both at the same table. I accepted, but only after e-mailing a caveat to the proposed group:
Elizabeth hosted an organizing meeting for the group on Tuesday. It was held at the Broadridge offices in New York with an option for virtual participation via the Internet or phone dial-in. You can guess where this is heading …
I decided to participate via the Internet. Ten minutes prior to the meeting, I went to the indicated website, downloaded some software, logged in, and waited. The time for the meeting start came and went. A text message appeared:
Other people waited. We were supposedly all muted, but some man inadvertently un-muted himself and proceeded to conduct a vigorous phone conversation with a business associate while we waited. Fortunately, we could hear only one side of the call, but the security breach was frightening.
Another message appeared:
A new voice abruptly spoke across the interface, asking if this was the “Broadridge meeting”. No one replied. There didn’t appear to be a moderator. I wondered if I should turn off my mute to explain that I wasn’t sure either.
I called Jim McRitchie on my cell phone. I had asked Elizabeth to invite him to join the group, which she had done. Jim was waiting like me. Somehow, his mute was off as well, so our entire conversation was broadcast over the interface. Jim and I spent several embarrassing minutes trying to turn his mute back on.
Another text message appeared:
The message appeared applicable to dial-in participants. As we were trying to participate over the Internet, the message didn’t seem to apply to Jim and me … or did it?
We waited a few minutes, but it was now about a half hour after the meeting was supposed to start. We decided to hang up and both attempt the dial-in option. When we did so, we both found the meeting was in progress. Apparently, in switching the dial-in number, Broadridge had found it necessary to abandon audio via the web interface. No one had told us. I immediately fired off an e-mail to the distribution list to inform anyone else still on the web interface.
The meeting was lively, at least once Jim and I started to participate. Of the issues raised, here are a few high notes:
1. Virtual meetings have potential to restore purpose to annual meetings that has largely been lost in recent decades. Any best practices should not simply embrace existing practices but should “push the envelope” on what virtual and social networking technology make possible.
2. Virtual meetings should be attended by a facilitator or ombudsperson representing shareowners. That person might ensure transparency, field calls from shareowners unable to connect to the meeting, prioritize shareowner questions or other tasks.
3. Quarterly earnings calls have somewhat replaced much of the give-and-take that is supposed to occur at annual meetings, only the audience is hand-picked analysts instead of shareowners. Maybe there is a lesson in this.
4. The existing practice of allowing shareowner questions only after polls close is absurd. Shareowners should be allowed to ask questions of management and proposal proponents before polls close.
Little was actually resolved at this organizing meeting, especially the critical issue of whether virtual-only (as opposed to hybrid) meetings should be allowed, either now or at some point, once technology and procedures have developed more.
The meeting was constructive, if only for airing issues. The technology failure was a warning that it is too early for corporations to be conducting virtual-only meetings. Broadridge, however, seems intent on continuing to push virtual-only meetings.
Elizabeth has promised to follow up with everyone. Hopefully she was pleased with the initial discussions, but she is likely under pressure to achieve an outcome that benefits Broadridge’s virtual meeting services. We will see what direction this takes. I will keep you informed.
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