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When Warren Buffett hosts Berkshire Hathaway’s annual meeting on April 30, it will be attended by thousands drawn to Omaha, Neb., for the “Woodstock of capitalism.” The event boasts everything from Buffett’s value-investing advice to discounts on furniture and car insurance.
Buffett’s fun includes a shareholder picnic, a 5K race, a cocktail reception and even games like a newspaper-tossing contest. Despite its popularity, it’s an experience that has little in common with most shareholder meetings.
Once an opportunity to bring investors together to celebrate company achievements with a glitzy party, the vast majority of annual meetings have become perfunctory. Organizers — imagining a clutch of retired employees showing up for coffee, doughnuts and a social get-together — have dispensed with flashy, high-impact meeting events, leading to an overall decline in shareholder participation.
In addition, the logistics of getting directors and investors of increasingly global firms in the same room are getting more difficult every day. Combine that with the growing difficulty of managing security concerns, and major in-person annual meetings start to seem less and less desirable.
Enter the virtual shareholder meeting, which is fundamentally changing the game for boards seeking participation by retail and institutional shareholders. Any shareholder can tune in via the internet to vote and ask questions. Through technology, shareholders are empowered to participate whenever and wherever they want. Even Buffett, one of the few chairmen who should keep his in-person meeting, accepts the value of adding a digital component to the live meeting and will webcast part of his meeting this year.
In 2015, there were 134 virtual shareholder meetings, more than double the 53 held in 2012. Companies such as Hewlett-Packard, Martha Stewart Living Omnimedia and recently Intel have embraced virtual-only shareholder meetings. Others, like Microsoft and TD Ameritrade, hold “hybrid” meetings that include a physical meeting with a virtual element. This trend makes access to companies substantially easier, effectively using modern technology to humanize executives and offering a way to connect corporations with their shareholders. Every CEO believes in something and should use any opportunity to efficiently communicate his or her message, vision and strategy to as many shareholders as possible.
The advantages are obvious. Virtual shareholder meetings are more efficient and offer greater security. Most importantly, they always increase participation, giving executives an audience interested in hearing about the company and its new products. It would be a missed opportunity for any company to pass up the chance to welcome and engage all its investors.
At Broadridge, our last physical annual meeting in 2008 attracted just three shareholders. Our first virtual meeting the next year attracted 186 shareholders.
