Last updated on June 23rd, 2023 at 07:58 am
Planning of Virtual Shareholder Meetings
A virtual shareholders meeting means that your annual shareholders meeting takes place exclusively online without a corresponding physical meeting, and shareholders are only able to participate and vote in it online. In times of the current pandemic, it is the best way to remotely increase your company’s engagement with your investors and shareholders with greater convenience and security.
Virtual AGMs offer the following benefits:
- Conducting secure shareholder meetings virtually enables more effective management, while demonstrating transparency and strengthening your relationship with your audience.
- Shareholders can participate from anywhere regardless of their location, making the meeting far more accessible to the vast majority of shareholders who are unable to attend physically.
- There is less travel by shareholders and board so this consequently reduces the company’s carbon footprint and saves time and money for all.
- Advanced technology facilitates Q&A and messaging which ensures shareholders can effectively hold the board to account.
- Substituting paper for digital voting means the process is more transparent, with instant results shown to participants and a full audit trail.
What will you need for a virtual AGM?
For a virtual AGM, you will need the following requirements:
- Full image and sound broadcast of the entire event
- Secure authentication process
- Digital transmission of proxies up until online voting
- Option to send questions in text form via digital communication channels which can then be read out and answered by the board
- Prior to the meeting: sending electronic access data to shareholders so they can access the online shareholder portal
Challenges of virtual meetings
Below are some of the common issues companies and shareholders normally encounter while holding Virtual AGMs:
- Technology hiccups: Sometimes technology issues as having a negative impact on shareholder participation – both from the company’s side and the user side. Any last-minute changes to a virtual meeting sometimes causes problems with joining/authentication and general log-in difficulties.
- Question submission practices: Some companies limit questions to those submitted in advance of the meeting.
- Question selection: Certain investors/shareholders wonder whether companies “cherry-pick” questions or limit the ability to ask questions live.
- Limitation on shareholder proposal presentations – or the inability to present: In some cases, limitations are placed on the process for shareholders to present their proposals.
Leading practices recommended for holding Virtual AGMs:
The Best Practices Committee for Shareowner Participation in Virtual Annual Meetings has published the following recommendations related to holding virtual elements of annual meetings:
- Consider the items that will be voted on at the annual meeting, and how a virtual-only meeting will support those discussions.
- Ensure all shareholders have equal access to participate in the meeting, including with regard to presenting proposals and discussing concerns.
- Ensure shareholders can access board members virtually-by seeing and/or hearing them.
- Ensure the company’s technology can keep up with the expected volume of meeting attendees and ensure that technical support is available for remote participants. Solicit feedback after the meeting to find areas for improvement.
- Create formal rules of conduct to govern shareholder meetings – whether parties are attending in person or virtually. These rules would include procedures for transparency – for example, how the company will queue questions received virtually versus in person.
- Establish guidelines around the process for questions. For example, create timelines and limits for questions/comments and establish when questions may be out of order. The guidelines could also include that questions received online during the meeting will be posted, with answers, on the company’s website after the meeting.
- After the meeting has concluded, archive the video for future viewing.
With the uncertainty about the pandemic scenario and the associated health security risks, Virtual Share Holder Meetings are most ideal and most prevalent in the last couple of years.
The Confiex team specializes in providing premium virtual data room solutions tailored for businesses. With their vast experience in working with document sharing platforms, they have been actively supporting the Virtual Data Room community since 2015 by offering valuable information to users free of charge.