Overview — In recent years, a small but growing number of companies have held annual shareholder meetings exclusively online or provided for online participation. Some of the early-adopting companies that decided to switch to an annual shareholder meeting held exclusively in cyberspace (without a physical meeting of shareholders happening simultaneously) received objections from investors and negative publicity, and this topic continues to be debated in corporate governance circles. However, the fact that demand for virtual shareholder meetings continues to increase suggests that companies are recognizing the benefits of holding an online-only shareholder meeting or offering an online component. For companies thinking about making the move to a virtual shareholder meeting, the benefits of taking the shareholder meeting online must be balanced with potential concerns of shareholders.
1. What is meant by a virtual shareholder meeting?
Virtual shareholder meetings are generally conducted in two formats: (1) the virtual-only meeting which is held exclusively online, replacing the traditional in-person meeting, and (2) the hybrid shareholder meeting which is held in-person at a physical location and is open to online participation by shareholders remotely. In both formats, shareholders are validated and able to cast their votes at the meeting in real time, rather than just watching the proceedings through a supplemental webcast of the live meeting over the internet. Broadridge Financial Solutions has developed a platform that most companies use for their virtual shareholder meetings…
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