Virtual AGM – Debunking The Myths

Having attended a few conferences and exhibitions recently across the US & Canada, it seems to me that there is a general sense of wariness around virtual shareholder meetings, and whether these are a positive or negative force to ensure good corporate governance. From talking to many CoSecs, I am constantly being asked variations of the same 5 questions, so I thought I would debunk some of the common myths that surround virtual AGM and shareholder meetings.

Hosting a Virtual meeting will disengage our shareholders

Its not news that shareholder attendance at annual meetings is in decline, and with the format of the annual meeting remaining relatively unchanged for years, its no wonder that shareholders are not making the effort to attend an annual meeting. Given this backdrop of apathy, coupled with a desire for issuers and investors to improve shareholder engagement, I’d like to debunk the myth that a virtual meeting could somehow stymie interaction and engagement, and actually, I believe they can materially increase that.

A Virtual meeting means that shareholders can’t hold the Board to account

This is simply not true. Virtual meetings offer the same transparency as an in-room only meeting, ensuring that there is still a forum to hold the Board to account, and to build the necessary trust between the Board and the Shareowner. The technology already exists, and is being used every day, for attendees to submit questions and comment. This can be done by simply typing those in, they can be moderated, or not, as required, they can even be displayed to the rest of the audience which can promote further discussion – rather like a shareholder standing and speaking in the room. And, of course, its still possible to allow for verbal questions – using speaker queuing technology. This all speaks to the concepts of trust and transparency.

A virtual meeting prevents inclusivity

A virtual meeting actually offers greater benefits for accessibility than holding an annual meeting in a fixed, physical only location. Many shareholders are much less willing to travel long distances, which can often mean a large expense for travel and hotels. And if an individual represents or owns shares in multiple companies, attending numerous physical only annual meetings becomes a costly and time consuming process.

The adoption of virtual tech is just too complicated

Many governance processes have already become digitized and dematerialized, with a great deal of innovation being welcomed by issuers (e.g. eComms, electronic proxy etc). And whilst the virtual platform itself has taken many years to develop and refine, running a virtual meeting is as simple as accessing a web page or using an app on a mobile device. The use of mobile is ubiquitous – mobile ownership is now greater than that of desktop – and its functionality is simple to use. Its always a good idea to hold a trial run of your meeting, so the Board and the Chair are comfortable with how any voting results are displayed, or how to view questions, but for shareholders and issuers alike, the adoption of virtual technology is simple and straightforward.

A virtual meeting isn’t secure

Again, this is a myth that is easy to debunk. There are multiple measures put in place to keep digital AGM secure, from anti-hack platforms to tight security protocols to secure cloud based networks. The security of a virtual meeting is paramount to any facilitator. What’s more, any entrant into a virtual meeting platform would need to be authenticated. Credentials are communicated to attendees in advance of the meeting, and without these, access to the meeting through a webpage or through the app, would be prohibited.

Changing demographics, alongside changing expectations of how meetings and their components are delivered, means that modernization of the Annual Meeting is inevitable.

Lumi, as well as me personally, are passionate advocates for the adoption by issuers and their advisors of virtual meeting technology. Whether that is part of a more cautious adoption through the use of hybrid – holding a physical meeting that also allows for remote participation – or by following in the footsteps of many issuers that have already gone fully virtual – the benefits to both boards and shareowners are clear. Both retail and institutional investors value the annual meeting, and the opportunity to engage with the Board. But if the virtual approach is taken seriously, the content is appropriate and the board are behind a virtual meeting, then issuers can benefit from both the logistical advantages and efficiencies of a virtual approach, whilst increasing reach, attendance and interaction with your ownership.

If you don’t have time to read the whole blog or simply want to find out more about the frequently asked questions regarding a hybrid AGM then download our free resource here: