More On Virtual Forums: Maybe The Best Good Governance Idea Ever

While Virtual Meetings have been getting lots of notice of late, we think that Virtual Investor Forums have the potential to transform the corporate governance landscape in an even bigger and better way:

We like the idea of making the discussion of important governance issues a 24/365 process rather than a once a year event – where at one extreme, thousands of meetings last 15 minutes or less, and not a single question is asked – and at the other extreme, like at Citicorp, for example, gadflies and assorted other no-nothings yammer on for six hours or more about basically trivial concerns.

We also like the idea of allowing the dialogue to take place on a central, company-sponsored site – to be sure the company IS tuning in – and can respond if they feel some factual info or a broader perspective is warranted – and if they want to offer it. We very much dislike the special interest group chat rooms that have sprung up – and there are several of them out there – where basically malcontented and typically ill-informed people share opinions and egg each other on to vote their proxies against management. Company-sponsored forums will quickly put these sites out of business – at least with respect to the sponsoring company’s affairs.

We especially like the fact that company-sponsored forums can surface, and often solve problems, before they can become big ones; A great thing for companies and investors alike. And, while we think there may be some value in allowing current investors to self-identify themselves as such if they wish to, and for the Forum’s “system” to validate the fact that they are investors, we think it doesn’t matter all that much and that smart companies will want to keep their Forums open to anyone who wants to participate.

Finally, while we noted with interest that Broadridge petitioned the SEC to mandate such Forums, we feel confident that market forces alone will provide sufficient impetus for them to take off, and to flourish…And who knows? Maybe one day all the governance issues will have been resolved… though we doubt it.