It’s no secret that what investors want is to meet their holdings face to face. And even though we’ve come a long way since you needed expensive, specialist equipment to run a video meeting, companies have continued to travel the world on roadshows and city-hop for meetings. Then Covid-19 forced country after country to lock down, and in-person meetings became impossible. Time for alternative tech to step in.
‘We’ve gone virtual,’ Adrian Rusling, founder of corporate access firm Phoenix IR, told IR Magazine in late March. At the time, the firm had already ‘transformed five roadshows into virtual events’ with Rusling adding that ‘we’ll continue doing this until it’s safe for everyone to get out and about again.’
Video might have been the obvious choice to wheel in but, as people began to do everything from checking in on gran to throwing virtual dinner parties via video in their personal life, it hasn’t necessarily been first choice for companies.
‘Some users have Luddite tendencies,’ notes Rusling. ‘Importantly, however, there are also some IT constraints due to corporate firewalls and security policies, particularly when working remotely due to Covid-19.’ This is something Todd Hicks, CEO of securities and corporate compliance analytics firm Intelligize, has also seen. Discussing the situation in the US, he says ‘companies have [had] a very short time to get a handle on a lot of different things [including] governing documents, relevant state law, SEC regulations and stakeholder sentiment.’ For example, some companies have had to amend their own bylaws just to allow meetings to even take place remotely.
The unprecedented nature of the situation means there have been a lot of unknowns and things have been changing fast. At time of writing, some US states are allowing flexibility on rules governing meeting location, making it easier for firms to move to virtual-only gatherings, while Hicks notes that a number of large investors previously opposed to virtual meetings have publicly supported moving to different formats, though some are asking for assurances that this would be a one-off. Service providers have also been making adjustments – and investments – to deal with the additional demand.
And while companies might prefer an audio call, they should think about their shareholder base when choosing a virtual meeting format, says Hicks. ‘If companies are dealing with contentious shareholder proposals or stakeholders that have traditionally opposed virtual-only annual meetings, they may want to consider live video feeds,’ he says, adding that ‘prolific shareholder proponent James McRitchie says, Ideally, shareholders should be able to see and communicate with other shareholders, even at a virtual meeting.
‘Fellow virtual-meeting opponent the CII has also suggested that all key company representatives in attendance, including – at least – the chair, CEO, any lead/presiding director, chairs of key board committees and the corporate secretary should have a live audio and video feed.’ What about the lasting communications impact of such a long lockdown? The efforts of the IR community – ‘even in the current chaos’ – mean shareholders will walk away from this proxy season with a feeling that companies value their shareholders’ participation ‘regardless of format,’ says Hicks. He predicts our time in isolation will ‘accelerate the trend toward virtual-only annual shareholder meetings.’
Rusling agrees that ‘people will become more comfortable doing things virtually’ but adds: ‘Nothing beats physical contact.’
This article appeared in the Summer 2020 issue of IR Magazine
