Inspectors Of Election: More Important Than Ever With VSMs

Since the very first VSM hit the airwaves the OPTIMIZER has been advising that the Inspector of Elections should be playing a key role - mainly because, with everything taking place in cyberspace, investors really need some added assurances that all of the voting is taking place, and being recorded completely, and strictly “according to Hoyle.”

For 2021, given the likelihood that almost all Meetings of Shareholders will be VSMs, and in light of some oddball 2020 developments, we are urging issuers to be sure that the eyes, ears, brains – and experiences of their IOEs will be fully engaged, and fully up to the tasks at hand. Here are our top-tips:

Be sure to select an Inspector of Elections that truly knows what he or she is supposed to do – AND who can stand up and confidently address any questions – or challenges that may arise with respect to the voting process, and the final results.

Be sure to introduce the Inspector at the Meeting – and, ideally, we say, mention the Inspector’s Oath – and have the Inspector certify that a quorum is present.

Be sure to have the Inspector(s) review the proposed Meeting Script well in advance – and invite their comments and suggestions. (Most expert IOEs have attended dozens, and often hundreds and sometimes thousands of Shareholder Meetings, and are well-versed in scripts that work smoothly and well – as well as spots that might cause bumps in the road. (We are 99.9% sure, for example, that none of the CT Hagberg LLC Inspectors would have failed to review the script, or would fail to point out the too-abrupt closings of the polls, or the failures to give fair-warning – and to allow ample time to vote online - that we saw in 2020… but that were so easily fixable.)

Be sure to have the Inspector attend the all-important dress rehearsal we advise, to test all of the technology – and connectivity. Again, an IOE who has attended many meetings will often have useful suggestions to make on how to best manage the Q&A – and on the overall “run of show.”

Consider having the IOE, rather than the Meeting Chair, briefly summarize the voting outcomes: No need to read all of the numbers, as once was the custom, but simply to say that the directors were elected, the appointment of auditors was ratified and that each proposal was either “approved” or “not approved” – being sure to avoid terms like “passed” or “failed” or the decidedly non-neutral phrase, “was defeated.”

Be sure that the IOE will know what to say and do if any of the outcomes may require a bit of extra due diligence, and time, before certifying the final voting.

Be sure your IOE will be able to view most if not all of the information the Management Team is able to see via the Meeting App: Typically, the number of shareholders and the number of guests in attendance, the number of voters or, more precisely, ‘attempted votes’ – just to be sure the final results will pass both the “sniff-test” and the “sanity test” with the IOE – and with the reported outcomes.

Be sure the IOE will be able to observe the number of questions in the on-line question queue, we advise…so he or she could verify, if required, that all questions were indeed answered… if the company asserts it’s true.