Let’s put it bluntly: Your company - and you - simply can not afford to let anyone who might potentially be carrying the coronavirus “crash” into your meeting-space this season.
So step one has to be to immediately - and drastically - limit the number of “physical attendees” you will allow: We say to no more than three; the Chairman, the Corporate Secretary or Governance Officer and a skilled “technician” to smoothly stream the audio to the Web. Each one can easily maintain safe and appropriate “distance” from one another - and actually, the Secretary of the Meeting can attend via phone, so you’re down to two.
Step-two, of course - and lots of readers still have time to do this - is to draft your Notice of Meeting to make it crystal clear that your “Please Stay Home” message - and your rule to strictly limit attendance to, say, three people - will allow for no-exceptions. (By your meeting date, please note, the vast number of U.S. towns will likely be forbidding unessential travel, and limiting the number of people who can legally “gather” to five people or fewer anyway.)
The good news; these are not draconian steps at all: Your Senior Officers, Directors, outside Auditors, Inspectors of Election - and, so far at least, any shareholder proponents you may have - have been perfectly happy to attend and speak their parts via a conference call. And all of them are, or ought to be, fully able to perform their prescribed duties with a reasonable degree of perfection. (Do read further down for some important tips to be sure this happens.)
Even better news; while converting to a “Virtual-Only Meeting” is very much the gold standard - one that allows all shareholders to “attend” and to ask a reasonable number of reasonable questions - and to VOTE in real-time, over the Internet - it is perfectly OK, under the current circumstances, to remind people of the importance of voting - but not necessarily to enable online voting in order to host a “Virtual Meeting,” given the time constraints, and the likely shortage of capacity on the part of key service suppliers as demand continues to grow.
Let’s turn now to the very important subject of not allowing Covid-19 to TRASH your annual meeting - by minimizing the importance of the event, whether by accident or by design - or by “cheapening” the experience - by severely shortening and rushing the agenda, for example - or by having it marred by technical glitches or outright snafus due to a hasty, slapdash planning and delivery process on your part, or that of your key service suppliers.
HERE ARE SOME PRACTICAL TIPS - AND BEST PRACTICES TO OBSERVE THIS YEAR - STARTING FROM THE TOP-OF-THE-HOUSE ON DOWN:
All the most senior officers (“The C-Suite”) and ALL DIRECTORS should be required to attend the Virtual Meeting via a conference call…unless there are truly exceptional circumstances that would prevent one or more of them from dialing in.
Each Director and C-Suite Officer should be introduced, and should acknowledge their attendance by saying “Good morning” or “Pleased to be here.”
Ideally, a nice color-photo of each person should appear on the screen as they are introduced. Another Best Practice: post photos, bios and a brief statement from each director on your meeting website - BEFORE the meeting officially begins, and certainly as one of several useful links that can be provided for folks who may view the meeting later on.
All virtual attendees need to be carefully prepped on how and when to mute and unmute their phones - and to work from a quiet space - and, above all, to keep their phones on mute, except when it is their turn to speak. (Read the horror story that popped Out Of Our In-Box, elsewhere in this issue.)
Your outside auditors will be thrilled, we are sure, to participate solely by phone. (We did a quick poll of five of our Inspectors of Election, who’d covered over 200 meetings in total over the past five years, and not one of them could recall a single question directed to the outside auditors during this time! Not to say it doesn’t happen, of course, but who could really object to a telephonic response? And what a time and money saver!)
You should take special care with a Virtual Only Meeting - where nothing is visible to the naked eye - to appoint Inspectors of Election who are truly Independent - not insiders, retirees or reps from your proxy solicitors - and people who have written procedures to “inspect” - and to do additional due diligence if any results are “close” - and who can stand up for themselves and their reported results if challenged.
So far this season, shareholder proponents have been happy to present their proposals remotely - and, while it is nice to give them a choice of sending a pre-recorded presentation or maybe even a video clip if your streaming technology permits - proponents have been perfectly fine to date to simply call-in at the appointed time.
SOME ADVICE ON CREATING A USEFUL - AND A REWARDING EXPERIENCE FOR ATTENDEES:
Over the past 10 or 12 years, when so-called Virtual Meetings first came into use, we’ve been saying the same thing: “Listening to - and watching the average virtual meeting is like watching paint dry.”
The vast majority of Virtual-Only Meetings that have been held to date have been held by smaller and often newer companies, where there were no controversial issues on the ballot, or in the press. So the paint often dries in ten minutes or less - and, most often, there are no online votes - and no questions at all.
But if your company has a large retail-investor population, a history of in-person attendance at your meetings - or if there have been “performance issues” - or if you have been much in the press - or if the Covid-19 epidemic is likely to have a major impact on your company going forward - you will be very wise to work a bit harder on your meeting preparation and delivery.
Please, we urge you, try your best this year to show respect for your shareholders - and to do your very best to create a useful - and interesting - and rewarding event.
Here are a few practical tips:
Invite your shareholders to tune into the meeting 15 minutes or so in advance, where they can view the Agenda, Rules of Conduct - maybe a “Meet the Board Presentation” - and where they can click to type in a question in advance if they would like to. (More about this later.)
A spoken “welcome to the shareholder meeting” with an overview of the site, and the proceedings to come would be a very nice touch…and certainly it doesn’t take rocket science to do.
Consider playing some soft but upbeat music in the background, so we won’t wander away or fall asleep…Pick up the pace and the volume (but slightly please) as you get closer to the meeting time. Try to make us THINK that something interesting will be coming…and then deliver on it!
Consider having the Chairman open the meeting - then to introduce a brief but upbeat and informative audio-video clip. (See our updated advice on Meeting Etiquette, in this issue.)
Consider having one or two other short video clips, featuring other speakers - to add variety - and items of interest - to the meeting.
PLEASE don’t rely solely on PowerPoint slides as the only visual elements to your Meeting. In many cases they actually take away for the impact of your Chairman’s message - and your corporate message as a whole.
OUR ADVICE ON TAKING SHAREHOLDER QUESTIONS DURING THE MEETING
Companies that will have a Virtual-Only Meeting MUST be able to take questions from meeting attendees.
It is equally important, we say, to allow for a reasonably robust Q&A period at ALL Virtual Meetings, just as one must do at in-person meetings.
This, understandably, gives a lot of issuers and Meeting Chairmen “the jitters” - since it is hard to run a meeting and monitor questions that are being hand-typed in real time by shareholders and displayed on the Chairman’s computer screen. So here’s our advice on what to do:
The formal question-period should begin AFTER the official business of the meeting is concluded and the preliminary results have been announced.
Collecting questions in advance of the meeting - whether on the pre-meeting screen or even better, over the Investor Web-page for a week or two before the meeting as well - is a very good way to get a feel for likely investor questions - and to get a good jump on them.
We think it is a best practice to allow guests to listen in, but questions asked during the meeting should properly come from shareholders only. (If your service provider’s technology does not allow you to positively identify shareholders, just ask questioners to identify themselves and rely on the honor system this year, we’d say)
The best providers of VSM services offer guidance, coaching sessions and rehearsals on how a designated Meeting Manager can and should review and tee-up questions for the Chairman to answer.
What is the Best Practice for taking shareholder questions at a VSM? The Broadridge White Paper on Best Practices for VSMs - that was written with a great deal of input from institutional investors, who are very concerned about procedures here - suggests that questions be collected in advance, and during the webcast, where attendees can type in their questions in real-time - AND via a toll-free number that will place callers in a queue that will allow questions to be answered on a first-come-first-served basis.
The white paper recommends that the Chair alternate between questions submitted in advance, questions ‘from the floor’ of an in-person or Hybrid Meeting, those that have been typed in - and those in a phone-queue. (This year, however, many companies that are concerned with implementing so many technical bells and whistles under tight time-deadlines are allowing typed-in questions only.)
Special care should be taken to anticipate - and certainly to seed-in, and be sure to answer some “hard questions.” Many virtual meeting attendees are somewhat “suspicious” about virtual meetings - and many are on “high alert” for instances where management - which does indeed have chances to cherry-pick questions - may intentionally “deep-six” the tough ones.
There is a self-regulating force at work here that issuers need to be aware of and that should keep most companies on a good path: The fact that shareholders who ask (and sometimes “plant”) some tough, but proper questions - can - and will - and very noisily - go public with their complaints if they feel that shareholder questions were improperly cut short - or worse, censored out.
What is a “reasonable time period to allow for questions at VSMs? We think that 1/2 hour is a “reasonable” amount of time to allocate - and in the vast majority of cases this will be more than enough time…
Please note, however, that even though your Rules of Conduct may prescribe a fixed period of time, there is no good reason to rigidly enforce a “hard-stop” on a Webcast. So here’s a word to the wise: If your company has had “issues” of any kind, you might be well advised to plan for a somewhat longer Q&A period, rather than to have any of your investors allege that you purposefully shortened the discussion period to “duck” important issues.
An important Best Practice, we think: Make sure to mention that ALL questions received - AND the answers - will be posted on the Investor Page as soon as possible. It is OK - and actually a best practice - to indicate that there were multiple questions on a subject, and to combine related topics into a single answer.
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