There’s been a bit of a kerfuffle lately about virtual, online annual shareholders meetings. It seems that Symantic Corporation recently held an audio only, virtual meeting where they took only two questions from shareholders. This angered a number of shareholders and Symantic came out of the process looking as if they lacked transparency, rather than looking as if they are on the cutting edge of technology. Gretchen Morgenson, the financial columnist for The New York Times, did a good job summarizing the meeting and the anger it engendered in its shareholders in her column on September 25th.
The issue however, is not the efficacy of online annual meetings. There are some obvious efficiency and cost savings benefits to be realized by enabling people to link electronically rather than forcing everyone to come to a single physical location. With today’s technology there are ways that will enable shareholders to actively ask questions and see management’s responses in real time. In other words, companies can structure transparent online annual meetings if they want to; it’s just that many of them are less concerned with transparency than they are with controlling the agenda and message.
To be fair, corporations have reason to be concerned about controlling the agenda. Many special interest groups, if given the chance, would monopolize the question and answer sessions of annual meetings in order to promote their own agendas. In order to combat this, corporations put in place all sorts of limitations and devices to filter out dissenting voices, from the requirement to submit questions beforehand, to time limits, to limits on the number of questions, to arbitrarily cutting off questioners. The result is that usually management ends up looking arbitrary and controlling rather than open to the owners of the company. And when the controlling is done remotely and electronically it looks even worse that it does in person.
So the issue to me is not whether shareholder meetings occur virtually, in person or a combination of the two: the issue is how does management treat the shareholders, even if they don’t like the shareholders’ point of view. For this I take a page from Cork Walgreen, the former CEO of Walgreens.
One of my duties when I was working at Walgreens was to organize the Annual Shareholders Meeting. Attendance at the meeting during the time I ran it grew from around 400 people to over 3,000, and as you can imagine, the number and type of people attending ranged from retirees and employees to sophisticated investors and special interest groups. Questions at the meetings from shareholders at the meeting could be anything and often ranged from complaints about stores being out of merchandise to expansion plans in the State of Alaska to the use of non-union labor in certain construction sites.
The interesting thing about all of these questions was how Cork Walgreen handled them. First, let me say that public speaking was not one of Mr. Walgreen’s favorite things. In fact, he disliked it intensely and rarely appeared in public. But when it came to the annual meeting, he stood up there and took all the questions that time permitted. His attitude was that the shareholders paid him to be in charge and that included answering questions at the shareholders meeting, in good times and bad, no matter how uncomfortable that may have been. He may not have given everybody the answers they wanted – in a forum like the annual meeting you can’t please everyone – but he always gave them the courtesy of listening and responding to their questions. And the shareholders respected him for it.
So the takeaway from all of this is that when you’re conducting your next annual meeting, be it virtual, in person or a combination of the two, take the time to listen to and respond honestly to the shareholders’ questions. In short, “Stand up and take it like a man”. The pain may be intense, but it’s brief. And no one will write stories about how rude you were to shareholders in The New York Times the next day.