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Activist Investors, Shareholder Proponents, Gadflies And Other Would-Be Speakers At Shareholder Meetings

Our Top 10 Tips For Dealing With Them

  1. Be sure to greet and meet briefly with shareholder proponents or their proxy holders well  before the meeting begins – to set a good and courteous tone, to make sure they are aware of the rules of conduct – and any time limitations there may be, and the reasons for them – and to be sure they will be sitting near a microphone when it’s time for them to introduce their proposals.
  2. If you have regular “gadflies” – or repeat attendees who try to offer a comment on every item that comes up, you may want to bite the bullet, take them aside, remind them tactfully about the time and question limits – and advise them that they will be much more effective presenters by observing them. if shareholders have complained in prior years, which, often, they have, consider saying so.
  3. Hand the rules of conduct to each attendee as they register, and ask them to be sure to review it before the meeting begins.
  4. Have some light refreshments available beforehand – and, ideally, have senior managers – and directors too, if at all possible – circulate among the attendees: it sets a welcoming and respectful “tone” – and very often, attendees will ask their questions then and there.
  5. Have the chairman of the meeting briefly review the rules of conduct with the audience before the official business of the meeting begins.
  6. Be sure that the rules are enforced uniformly – and that management observes them too. please, we urge, do not show favoritism to gadflies... it ticks ‘regular people’ off  big-time.
  7. Above all, be prepared to enforce the rules immediately if the first “gentle warning” and a second, firmer warning from the chairman is ignored.
  8. There is no need for the chairman to discuss the management position – and there is certainly no need to argue with shareholder proponents during the meeting: all the proposals have been distributed to shareholders well in advance – along with the company’s own “best shot” as to why they are in favor, or against each one – and – except in the rarest of occasions – the voting will not change by a meaningful number during the meeting. The easiest way to handle arguments – and comments – is to simply say “Thank you for your comments” and move on. (please note, however, that formal proxy contests – where sometimes minds are made up at the meeting – typically require a totally different approach.)
  9. If you are the chairman, remind yourself to never lose your cool: as the scriptures say, “a soft answer turneth away wrath.”
  10. Be prepared to conclude the meeting summarily – if the fire alarm sounds or the power goes off – or if, heaven forbid, the meeting threatens to get out of hand: have an “emergency script” at the ready that allows the chairman to declare that the meeting is over, and that, based on the proxies in hand, the directors have been elected and that final results on all items on the ballot will be posted on the company website as soon as practicable.