Way back in 2013 we published “A Little Primer on Annual Meeting Etiquette: Our Top Ten Tips on Meeting Manners, Plus One to Think On” - noting that “We’ve never done so from the perspective of meeting-attendees…And, after all, that’s what etiquette is all about, no? Being conscious of what our guests like to have…and delivering it.”
This year, with so many companies adopting Virtual Meetings, it occurred to us that this subject is, perhaps, more important than ever to think about - especially in the absence of the usual “meeting amenities” and person-to-person interactions that so many shareholders have come to expect.
So here are our revised top-tips - with the added “Virtual Meeting Notes” in red….
1. Always remember that meeting attendees are not only your guests, they are indeed “owners of the business” – and expect to be treated accordingly. When they are, they will be happy, and polite, and will think well of you and your company. When they are not – or if they witness, or hear what seems to them as a major breach of etiquette, or disregard for their status as owners, – they will be - and have a right to be - rather miffed, to say the least.
2. Accordingly, be sure to set a welcoming tone - from the very first encounter your guest will have with you and your staff until the very end: A neat and attractive venue helps hugely. This - along with welcoming signage, a “welcoming message” at Virtual Meetings and a truly welcoming staff - are essentials for setting the right tone…from your guests’ perspective.
3. Here’s another important thing to remember: A lot of us shareholders are kind of old…So we appreciate things like big and prominent signage, good lighting, comfortable seating, handicap entrances and facilities, A-V programs and slides that we can clearly see and hear…and again, welcoming and helpful staff. (We’d also promised several friends from internet chat rooms that we’d mention the need to think harder about “special accommodations” for people with visual and hearing impairments, and mobility issues - which many leading companies are indeed thinking about, and acting on these days.)
4. Having light refreshments is a must for in-person meetings in our book…something that more and more companies seem to overlook, or try to get away without these days…as a way of hustling us out as fast as possible…And don’t think we’re fooled here either! We don’t need anything real fancy. In fact, too-lavish a spread often sends warning signals to share owners. But having tea, coffee, juice, soft drinks and something light to eat is one of the top ‘welcoming signals’ a host can send. (The best refreshment idea we’ve ever seen in our 40+ years of meeting-going was at the old BellSouth, where they served Girl Scout cookies. What could possibly be nicer…or more “proper” in every way at a shareholder meeting? And mighty reasonable too, cost-wise.) This year, of course, if you DO have an in-person element to your meeting, be sure that everything on offer is pre-packaged and “available for pick-up” by attendees themselves.
5. We’ve long reminded readers about the many benefits of having officers and directors and business managers and official “hosts” available (with their names and roles or titles on readily-readable and distinctive badges) during at least part of the coffee-hour: Not only does this set a very open and welcoming tone – it often enables potentially hot issues to be addressed and defused ahead of time, and can provide answers to questions that would otherwise prolong the official meeting unnecessarily. See our tips elsewhere in this issue for having a “Meet the Board” segment - available before the Virtual Meeting begins, and afterward as well.
6. As with any other social occasion, attendees like to know the “rules of the road” – and what to expect. So we like to see a written agenda – and written rules of conduct too – and, of course, we expect that all attendees including the hosts – will faithfully abide by them. Our favored procedure is to have the Agenda and Rules personally handed to guests when they arrive, with a friendly suggestion that they review them before the meeting starts: Good etiquette, we say, as opposed to plopping them on the seats…Plus it increases the likelihood that people will read them…Plus, it’s one of the best meeting-security measures around, as long as you are ready to enforce the rules after “fair warning” to rule breakers: What could possibly be a worse CONT’D 10 THE SHAREHOLDER SERVICE OPTIMIZER FIRST QUARTER, 2020 CONT’D breach of etiquette, we’d ask, than letting some loudmouth - or worse yet an unruly mob - take control of the meeting? For Virtual Meetings, our advice is to post all of these materials on the Meeting Website - and make them available for review 15 minutes before the meeting starts…and afterwards, on the company Investor Page as well.
7. Apropos, and perhaps the most important rule of meeting etiquette – and our top safety tip too – is our longstanding dictate that the chairman must always be in charge: All questioners must wait to be recognized by the chair, and to properly identify themselves as being shareholders or proxy-holders with a right to speak. All questions must be directed to and disposed of by the meeting chair, who is solely responsible for deciding whether a question is “in order” at that point, and who should answer it…and when. Please see our tips elsewhere in this issue on Best Practices to handle incoming questions in a well-organized and scrupulously fair manner.
8. One of our pet peeves at annual meetings –and something that comes across as incredibly rude and disrespectful to attentive and well-mannered shareholder attendees — and maybe to officers and directors too – is when slam- bam introductions of officers and directors are made - and where, typically, the introductions are ungraciously acknowledged to boot: At in-person meetings - and at meetings that will be streamed live and that can also be re-played on the Company Website, Directors should be expected to stand up straight and face the audience when they are introduced…And to smile, and acknowledge the audience by holding up a hand, or with a little wave, so we can see them – and to remain standing until all directors are introduced and applauded. Same for officers that rate an intro. What bad form to see directors barely rise from their chair, then hunch down and turn quickly around - which happens at the majority of meeting we attend, sad to say. And what a bad message it sends - as if they’re embarrassed to be there, or have something to fear if they stand up, and out from the crowd. At Virtual Meetings, all Directors should also be expected to attend, via a telephone hookup - and should say “Good morning” or “Happy to be here” - both as a courtesy and to document their attendance. Directors need to be carefully instructed to place their phones on mute as soon as they have finished speaking to avoid background noise and, heaven forbid, other noises that are not suitable for the audience as a whole to hear. A quick P.S. as to whether directors should face the audience, rather than the chair: The best answer ever came from former Verizon Chairman Ivan Seidenberg, who told a questioner, “The Directors are doing their most important job: Watching ME… to make sure I don’t flub anything.” Case closed.
9. Another item that companies increasingly overlook these days in order to show us the door asap; your editors strongly believe that proper etiquette at a shareholder meeting requires a brief overview of the prior year, and a brief review of the important issues ahead…and the expected outcomes; (a) since it IS a “meeting of shareholders” and (b) to properly set the stage for the items to be voted upon. The current Covid-19 pandemic makes it more important than ever, we think, to give Meeting attendees an overview of the likely impact on company operations going forward. The new “slam-bam approach” - which many Virtual Meeting planners are often tempted to adopt - to race like sixty, to finish the meeting as soon as humanly possible - is literally the height of rudeness to attendees in our etiquette book. We also think that “proper meeting etiquette” requires that the official “business of the meeting” be disposed of FIRST – with a general Q&A period to follow the closing of the polls and the official “adjournment” of the annual meeting until next year.
10. A very important set of issues in our etiquette book is that the hosts should be highly respectful of our time: Never, ever use Robert’s Rules of Order at a shareholder meeting: It is decidedly NOT a parliamentary proceeding and, as mentioned, the chairman must always be fully in charge. No “movings and secondings” please. Everything is already in the written materials - and most of the votes are already in. Make sure your rules of conduct are fair – and reasonable ones to all reasonable attendees. Shareholders hate it when speakers hog the floor, and try to opine on every single thing. Having reasonable time limits for each section of the meeting, and for each speaker, are simply “good form” - and properly respectful of our valuable time. At Virtual Meetings, it’s worth noting again that Chairmen must pay special attention to allowing attendees to ask questions and must appear to be - and actually be - scrupulously fair in taking questions that are indeed “prescreened by management.” See our practical tips - and warnings about potential backlash - in this issue’s article about VSMs.
Something to think on: What about a parting gift?
In the old days, a gift (or gifts in the case of many consumer products companies) was de rigueur at shareholder meetings. Then, a few boorishly grabby shareholders – coupled with the new-era desire to make the meetings as quick and as boring as possible so we wouldn’t come at all – and then to shoo us out as soon as possible if we DID show up – caused the traditional “goodie bags” to go out of favor.
What does our own etiquette book have to say about this? First, no one should feel obligated to give a guest a parting gift – and none should be expected. But, on the other hand, shareholders ARE our owners – so a sample of our company’s wares is not only an especially gracious touch - it’s educational - and maybe even “promotional”. And face it, everyone loves a freebie.
But the best reason for considering a parting gift is that the chair literally holds the meeting in his or her hands if there’s a goodie-bag in the offing: We guarantee that everyone will bolt for the door the second the farewell goodie is mentioned and the gift-desk officially opens up.
This year, we’d strongly urge companies to consider a “parting gift” - in the form of a $1 donation to charity for each and every individual account that votes its proxy in time for the meeting, as Bank of America and IBM have been doing. BofA has seen the number of votes cast by individual investors rise by 50% over three years as a result, which added roughly 5% to its quorum - of mostly favorable-to-management votes.…
We’d also suggest that companies consider sending a simple thank-you note - or email - to retail owners who cast their votes….far easier - and much cheaper than paying proxy solicitors to chase down votes in a pinch!
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