A GROWING number of companies are using the web to give their shareholders opportunities to pose questions to directors and executives at their annual meetings.
Since many shareholders are unable to attend meetings in person, the move by companies to use the web could help to reengage apathetic retail stockholders in the annual meeting process. At many U.S. company meetings last year, less than 5% of retail shareholder accounts participated.
Google Inc. (NASDAQ: GOOG) recently opened a forum for stockholders to submit questions and vote for other shareholders’ submissions. The most popular questions will be put to the board and management at the company’s annual meeting on May 7.
To filter the questions, the Internet giant is using Google Moderator, a free application that it has long used for internal meetings. The White House used the same application for a Town Hall with President Obama last month.
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| Anyone with a Google account is able to submit and vote on questions for the company’s annual meeting. |
One of the least tech savvy companies, Warren Buffett’s Berkshire Hathaway (NYSE: BKR.A, BKR.B), broke with tradition this year to include an Internet component for its May 2 annual meeting. The company asked shareholders to email questions to leading journalists, who will choose which questions to ask at the meeting. A draw will also be held for shareholders in attendance who want to ask questions.
In the UK, Barclays plc (NYSE: BCS) included a form in its online annual report for investors to submit questions to the company. They are also invited to email questions to be asked at the meeting. Similarly, UK-based insurer Aviva plc (LON:AV) provides an online form for shareholders to submit questions for its upcoming meeting.
For several years, International Business Machines Corp. (NYSE: IBM) has invited shareholders to submit annual meeting questions online and then published answers after the meeting. It is doing the same thing for its 2009 meeting on April 28. Exxon Mobil Corp. (NYSE: XOM) has followed a similar process for the past two years, but does not post answers to questions online.
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| `”Your View” is a main section in Barclays’ online annual report. |
As we were first to report, this year Intel Corporation (NASDAQ: INTC) will become the first company to permit live voting at its annual meeting via the web. Shareholders will also be able to ask questions online during the meeting.
Last week, Intel launched a closed shareholder forum, which is built on the Investor Network platform of Broadridge Financial Solutions (NYSE: BR). I suspect Intel’s forum will be a flop because it is not public, because it demeans retail shareholders, and because it’s not clear what investors are signing up for.
Of all the approaches companies are taking, I like Google’s the most. It’s open, transparent and relies on the crowd to determine which are the most important questions. Best of all, any company can use the same approach for free.
Finally, let me just place on record that inviting questions from shareholders who are unable to attend the annual meeting is not new. Australian companies such as BHP Billiton and Commonwealth Bank have long included a printed question card with their meeting materials for shareholders to mail back to the company.
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RT @irwebreport: Companies using web for shareholder meeting questions [link to post]
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How does Intel’s forum “demean” retail stockholders?
Update: (I’ve edited the comment below for clarity in response to an email from Intel. New info is shown in italics.)
It’s not Intel’s forum platform, it’s Broadridge’s forum platform. Small shareholders have no incentive to participate in the forum because they will perceive that anything they say will not be taken seriously. This is because everyone is classified by the size of their shareholding. They’re not people, they’re just a holding size. This is Broadridge’s decision, and it reflects their worldview where everyone is just an account. Social media, of which shareholder forums are one form, is about people interacting with people. On Broadridge’s Investor Network, which Intel is using, everyone is anonymous by default. Although it should be permitted, anonymity is not conducive to serious discussion on forums. Usually, people who are anonymous have something to hide and are less accountable for what they say. It would have been much better not to show holding ranges and instead allow users to create a profile and identify themselves, if that is what they wanted. Anyone who chose to be anonymous would not be taken seriously by other participants.
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What Google is trying to do is really interesting. The target audience of any annual meeting is not only shareholders but also potential investors. From this perspective, it is a good idea that Google opened the forum to the public, including people who might be thinking of buying some shares.
I didn’t know Google Moderator, but it seems effective when a company wants to know what its shareholders think of the company. It would be interesting if a firm uses the program and answers the most popular questions regularly. That will help it to enhance its transparency to the public.