Shareholders have their say at annual meetings. When the numbers look good, executives puff their chests and tell us how their hard work has paid off for "our company." When the results are bad, the "our company" talk gets shelved, and seething stockholders may be allowed to vent, perhaps even to insult the CEO. Thereafter a security team typically escorts the executives to one or more private jets underwritten by these same owners. Owners will get to speak anger to power the following year, for perhaps three minutes apiece. In bad or good times, there must be a better way.
In either case, annual meetings are empty rituals that invite comparisons to kabuki theater or Iranian show trials. They meet a legal requirement, and generally accomplish little. Now, Intel has mitigated the suffering for all parties by moving its annual meeting entirely online. Delaware courts enabled such meetings almost a decade ago, but until now, major corporations have not exercised this right. We're not clear whether Intel sees this action as the latest extension of a radically cool technology fetish, or it's simply a way to avoid the Great Unwashed, but our friend Glyn Holton at
isuffrage.org thinks virtual annual meetings rank far worse than a floating decimal error.
There is every reason to believe that, with strong safeguards, virtual shareholder meetings could enhance shareholder participation in meetings while protecting—even restoring—shareholder rights that have atrophied over the decades. However, no such safeguards are in place. Intel and other smaller corporations are taking a go-it-alone approach, forcing virtual shareholder meetings on unhappy shareholders. After Delaware changed its laws [
Editor's note: to allow virtual meetings to replace flesh and blood meetings, at the sole discretion of management and the board], the
Council of Institutional Investors wrote the CEOs of all Delaware corporations asking them not to conduct virtual meetings. Unions have expressed concerns. Walden Asset Management has
encouraged shareholders to write letters to Intel.
Proponents believe virtual meetings will enhance shareholder participation by enabling more people to participate, and at no expense. Unimpressed, Glyn Holton describes a few nightmare scenarios — opportunistic technical snafus that cut off shareholders, pre-recorded speeches by executives, and software that doesn't enable activities one could pursue in a real meeting, to name but three. And then there's the isolation of individual shareholders at their screen-cells. If someone boos at his computer and no one hears it, did it really happen? This can be the ultimate divide-and-conquer.
Broadridge, the monopolist that controls the shareholder vote-counting trade, is now selling virtual shareholder meeting services, and Intel is using their new VSM (Virtual Shareholder Meeting) product. Intel may be the first drop of a coming torrent of virtual meetings.
Intel has
done some fine things in governance in the past, and has recently adopted "say on pay" to enable shareholders to cast non-binding votes on executive pay programs. Giving Intel the benefit of the doubt, we do believe there exist certain types of human engagement for which Internet technology offers a great leap backward. After the May 2010 webcast, we hope that Intel has a solid method for determining whether the owners' interests truly are being served.
Labels: Shareholders
Shareholders have their say at annual meetings. When the numbers look good, executives puff their chests and tell us how their hard work has paid off for "our company." When the results are bad, the "our company" talk gets shelved, and seething stockholders may be allowed to vent, perhaps even to insult the CEO. Thereafter a security team typically escorts the executives to one or more private jets underwritten by these same owners. Owners will get to speak anger to power the following year, for perhaps three minutes apiece. In bad or good times, there must be a better way.
