Elaborating on the expectations set forth in its 2021 Proxy Guidelines (reported on here), Glass Lewis's new approach to virtual shareholder meetings justifiably anticipates the increasing use of this meeting format going forward even after pandemic travel and group gathering restrictions are lifted, and acknowledges the benefits that may be afforded by technology for increased shareholder participation.
Beginning this year, Glass Lewis will generally support a VSM format provided that companies address these aspects in their meeting notice and/or on their website:
- When, where, and how shareholders will have an opportunity to ask questions related to the subjects normally discussed at the annual meeting, including a timeline for submitting questions, types of appropriate questions, and rules for how questions and comments will be recognized and disclosed to shareholders
- In particular where there are restrictions on the ability of shareholders to question the board during the meeting – the manner in which appropriate questions received prior to or during the meeting will be addressed by the board. This should include a commitment that questions which meet the board’s guidelines are answered in a format that is accessible by all shareholders, such as on the company’s AGM or investor relations website.
- The procedure and requirements to participate in the meeting and/or access the meeting platform
- Technical support that is available to shareholders prior to and during the meeting
Failure to provide adequate disclosure is likely to prompt a recommended "no" vote from Glass Lewis against the Governance Committee members, board chair, and or other meeting agenda items concerning board composition and performance.
For those jurisdictions that don't permit VSMs in the ordinary course, Glass Lewis asks that any proposed amendments to governing laws to allow VSMs require, at a minimum, disclosure of the procedure and requirements to participate in a virtual-only meeting at the time of meeting and a formal process for shareholders to submit questions to the board, which should be answered in a format that is accessible to all shareholders.
The post further outlines Glass Lewis's approach to hybrid and in-person meeting formats and its expectations concerning amendments to governing laws to accommodate hybrid meetings and virtual participation by directors and officers.
See our prior reports: "Vanguard, Glass Lewis Sanction Virtual-Only Meeting Format" and "Glass Lewis Will Consider Pandemic in its Proxy Advice: Here's How" and additional information & resources on our Virtual Shareholder Meetings and Proxy Advisors pages.