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A diverse 17-member committee representing retail and institutional investors, public companies, and proxy and legal services providers, and including the Society, released today these “Principles and Best Practices for Virtual Annual Shareowner Meetings” for companies to consider in connection with their annual meeting format decision-making generally, and virtual and virtual-only meetings specifically. The Principles and Best Practices acknowledge the growth in virtual meetings coincident with advancing technology that increasingly accommodates all shapes and sizes of virtual events, while recognizing the fundamental objectives of meaningful, equitable, and broad shareholder meeting participation.  

As captured in the release:

Five Principles

The Virtual Annual Shareowner Meetings Study Group outlined five guiding principles that every company should consider before undertaking a virtual shareowner meeting:

1. Broad investor participation in annual meetings should be valued and encouraged.
2. Shareowner meetings should promote equitable and equal treatment of investor participants.
3. Opportunities for meaningful engagement between investors and directors should be provided.
4. Issuers should communicate the benefits of a virtual meeting to shareowners.
5. Virtual meetings should be used as a way to provide meaningful open dialogue between shareowners and companies.

 12 Best Practices

“The principles and best practices the Virtual Annual Shareowner Meetings Study Group outlined represents the consensus of a diverse study group, after robust discussion, that accommodates evolving technologies in a way that expands and enhances opportunities for meeting participation by all shareowners in a fair and balanced way,” said Darla Stuckey, study group co-chair and president & CEO, Society for Corporate Governance. “Companies should consider these practices as a guide to ensure a successful outcome.” 

1. Recognize that the meeting format must be determined before the proxy is published.
2. When deciding on annual meeting format, companies and their boards should consider the items to be voted on at the meeting as well as other issues that may be of current concern to their shareowners.
3. Evaluate constantly changing technology and processes for supporting a virtual meeting.
4. Ensure equal access to all shareowners.
5. Create formal rules of conduct for the meeting.
6. Establish reasonable time guidelines for each participant in the virtual meeting.
7. Establish rules for when questions are out of order.
8. Establish rules to promote transparency.
9. Post questions received online during the meeting.
10. Ensure shareowners have access to board members.
11. Have a technical support line available.
12. Archive virtual shareowner meetings for future viewing.

In addition to relevant considerations accompanying each best practice, the timely white paper includes aggregate and state-specific up-to-date information concerning relevant state laws on virtual-only, hybrid, and in-person shareholder meetings.  

The majority of the working group participants previously developed consensus principles and best practices for virtual meetings, which were reflected in these June 2012 Guidelines for Protecting & Enhancing Online Shareholder Participation in Annual Meetings ("2012 Guidelines"). The Principles and Best Practices for Virtual Annual Shareowner Meetings released today are intended to supersede the 2012 Guidelines.