Responding to the many questions stirred
up by an
article distributed last week, the Forum
invited comments on the application of SEC Regulation FD to board
communications with investors, and, particularly, to FD’s application to
governance information. Yesterday, the Forum’s chairman, Gary Lutin,
distributed an
initial report of comments that resolved the question of whether FD
was intended to restrict board communication with a simple “no” answer
from the SEC. There also seemed to be broad agreement among experts –
including Patrick Quick, the securities lawyer whose quoted observations
had raised the questions, and Lynn Turner, who had been chief accountant
at the SEC when FD was adopted – about FD’s application to “governance”
information: whether or not the information is classified as “governance”
is irrelevant. What counts is whether the information is “material.”
Naturally, though, that gets complicated and raises more questions that
may be of interest to professionals. Mr. Lutin has invited more comments.
Special project to address director
responsibilities for investor communications:
Thanks to the leadership of David
Silverman, managing director of
Blue Harbour Group and chairman of the
NYSSA committee for corporate governance, we will be proceeding with a
special project suggested last week to address board responsibilities for
investor communications. Mr. Silverman will be organizing a workshop to
develop a report on “Communication Between the Board of Directors and
Shareholders: Opportunities and Considerations,” presenting issues to be
considered by participants in the Forum’s open meeting on July 13. Please
let us know if you have any suggestions of issues or insights to include.
Agenda,
the FT weekly for corporate directors,
addressed evolving board practices aimed at developing a better
understanding of investor interests. Some directors are reported to be
participating actively in shareholder meetings and analyst presentations,
and there appears to be increasing attention to the role of investor
relations officers in the competition for investors’ votes and capital.
Wal-Mart Stores, Inc.
(NYSE: WMY; $190 billion) put on its usual show at last week’s annual
shareholder meeting, as
reported in the
New York Times, inviting thousands of employees to join
thousands of shareholders in a celebration of the company’s successes. To
see the archived 12-segment video webcast of the festival and related
material, click
here.
We currently have an
observation list of nine examples of shareholder meetings, ranging
from big to small companies and from comprehensive to conventional use of
electronic communications: American Water, Berkshire Hathaway,
Best Buy, Dell, Intel, NVIDIA, Charles
Schwab, Walmart and Warner Music. Please tell us if
there are any other examples you think we should observe, or any
communication processes you want to know about that are not covered in
these examples.
Best
Buy Connects the Worlds of Investors and Customers
Getty Images
In its upcoming
annual meeting, Best Buy is planning to leverage the power of modern
technology to establish direct and informal communication with
shareholders participating from the comfort of their homes or offices.
Fireside Chat #4, October 23, 1933
Best Buy’s senior
corporate counsel, Lisa Lentini, used the terms “town hall” and
“fireside chat” to describe the atmosphere the retailer is seeking to
create in the June 24 meeting as it webcasts from Richfield,
Minnesota. Fireside chats, of course, evoke the direct, personal style
used by Franklin D. Roosevelt in his famous 1930’s radio addresses
that took his message directly to people’s living rooms.
“The presentation
style will be a lot more direct and informal compared to previous
years,” says Lentini. Viewing the meeting as more than just a
formality, she explained that, “we really want to take this
opportunity for investors and customers to understand what Best Buy is
both culturally as a company and for its consumer brand promise.”
Using technology and
direct, informal style Best Buy wants to highlight its brand message
of a “Connected World,” where people can stay in close touch with
their families, friends and colleagues anytime, anywhere. This vision
of a connected world was emphasized in the company’s CEO’s letter to
shareholders as part of Best Buy’s proxy filing.
The branding message
of a dynamic, connected company that directly communicates with
shareholders and customers has, of course, another point--Best Buy
happens to be in the business of selling the communications
technologies that enable people to create a connected world.
To keep the focus on
the direct connection and the technology supporting it, meeting plans
call for fewer speakers, shorter presentations, and changes in the
presenters’ seating arrangements, the company says.
One of the company’s
directors will join and greet the audience via video satellite. Those
attending in person will be able to see the director on a screen at
the meeting hall, while online participants will view him as part of
the video stream webcast. The company will be using satellite video
transmission to link him, the same way TV news broadcasts do it with
reporters in distant locations. The application of sophisticated but
familiar technology to the corporate event further highlights the
theme of a digitally “Connected World,” Lentini says.
This is the first
time Best Buy provides for electronic shareholder participation during
the meeting. While last year the company webcast the event, it did not
provide for online voting or the ability to ask questions. In addition
to provisions for participation, the company has opened a message
board before the meeting, which enables online participants to ask
questions and answer surveys as well as vote in advance. Best Buy also
created short videos of employee testimonials. These are attached to
the message board, which was launched on May 14 and will stay open
until a few days after the meeting.
The company says it
will attempt to answer as many questions as possible at the meeting.
Should some remain unanswered, the company will address them by
replying to shareholders individually after the meeting, or, if
appropriate, it may group related questions and post an all-inclusive
answer.
As it enables
existing and potential shareholders, customers, and other members of
their connected world to sit in the comfort of home on June 24 and
take part in the meeting via video stream, Best Buy is, in effect,
reaching out to various audiences in disparate geographies in a kind
of personal touch that – perhaps ironically – can only be done using
remote communications technology.
This Forum
program is open, free of charge, to anyone concerned with investor interests
in the development of standards for conducting shareholder meetings
with electronic participation.
As stated in the posted
Conditions of Participation,
the Forum's purpose is to
provide decision-makers with access to information and a free exchange of
views on the issues presented in the program's Forum Summary. Each
participant is expected to make independent use of information obtained
through the Forum, subject to the privacy rights of other participants.
It is a Forum rule that participants will not be identified or quoted
without their explicit permission.
The organization
of this Forum program was encouraged by Walden
Asset Management, and is proceeding with the
invited leadership support of
Broadridge Financial Solutions, Inc. and
Intel Corporationto address
issues relevant to broad public interests in marketplace
practices, rather than investor decisions relating to only a single company. The Forum may therefore invite program support of several companies that can
provide both expertise and examples of leadership relating to
the issues being addressed.
Inquiries about this Forum program and requests to be included in
its distribution list may be addressed to
e-mtg@shareholderforum.com.
The information provided to Forum participants
is intended for their private reference, and permission has not been
granted for the republishing of any copyrighted material. The material presented on this web site is
the responsibility of
Gary
Lutin, as chairman of the Shareholder Forum.
Shareholder Forum™
is a trademark owned by The Shareholder Forum, Inc., for the
programs conducted since 1999 to support investor access to
decision-making information. It should be noted that we have no
responsibility for the services that Broadridge Financial
Solutions, Inc., introduced for review in the Forum's
2010 "E-Meetings" program and has since been offering with the “Shareholder
Forum” name, and we have asked Broadridge to use a different name
that does not suggest our support or endorsement.
