Find out everything you need to know about Virtual Shareholder Meetings for your Private Limited Company. From engagement to security and everything in between, this guide answers some of the most common questions about the planning and process of Virtual AGMs. Click below to download your copy:
With the COVID-19 pandemic causing such widespread upheaval to all aspects of daily life, I suspect few individuals outside of the ‘industry’ have considered the impact that restrictions on travel, and the lockdown on public gatherings of more than 2 people, is having on AGMs.
Yet for many, the AGM is a legal or constitutional requirement for a huge number of listed organisations, member-based associations, sporting federations and not-for-profits. Governance professionals are being forced to consider options for their AGM that up until recently would have been considered ‘extreme’. Hold an AGM behind closed doors with no shareholders present? Never… Take my AGM entirely online and have both the board and shareholders attend virtually? Legally confusing and controversial for some……We might not be able to comment on the legalities of these options for your organisation, or the possible impact on shareholder/member disenfranchisement, but what I can do is to help to dispel some of the ‘fear’ that seems to exist when anyone mentions a virtual meeting.
Having attended a few conferences and exhibitions recently across the US & Canada, it seems to me that there is a general sense of wariness around virtual shareholder
Hosting a Virtual meeting will disengage our shareholders
ThiS is simply not true. Virtual meetings offer the same transparency as an in-room only meeting, ensuring that there is still a forum to hold the Board to
A virtual meeting prevents inclusivity
A virtual meeting actually offers greater benefits for accessibility than holding an annual meeting in a fixed, physical only location. Many shareholders are much less willing to travel long distances, which can often mean a large expense for travel and hotels. And if an individual represents or owns shares in multiple companies, attending numerous physical only annual meetings becomes a costly and
The adoption of virtual tech is just too complicated
Many governance processes have already become digitized and dematerialized, with a great deal of innovation being welcomed by issuers (e.g. eComms, electronic proxy etc). And whilst the virtual platform itself has taken many years to develop and refine, running a virtual meeting is as simple as accessing a web page or using an app on a mobile device. The use of mobile is ubiquitous – mobile ownership is now greater than that of
A virtual meeting isn’t secure
Again, this is a myth that is easy to debunk. There are multiple measures put in place to keep digital AGM secure, from anti-hack platforms to tight security protocols to secure
Changing demographics, alongside changing expectations of how meetings and their components are delivered, means that modernization of the Annual Meeting is inevitable.
Lumi, as well as me personally, are passionate advocates for the adoption by issuers and their advisors of virtual meeting technology. Whether that is part of a more cautious adoption through the use of hybrid – holding a physical meeting that also allows for remote participation – or by following in the footsteps of many issuers that have already gone fully virtual – the benefits to both boards and shareowners are clear. Both retail and institutional investors value the annual meeting, and the opportunity to engage with the Board. But if the virtual approach is taken seriously, the content is appropriate and the board
If you don’t have time to read the whole blog or simply want to find out more about the frequently asked questions regarding a hybrid AGM then download our free resource here.
While there has been a steady evolution of greater digitalisation/dematerialization in AGMs and shareholder meetings over the last couple of decades, the move to so-called virtual meetings has generated a lot of attention. The US has led the way, but other regions have seen growing interest, including adoption in the UK and Canada, as well as garnering the support of the Australian Shareholders Association. In the US, the format is commonplace (see figure 1), and the debate has moved on from whether or not to run a virtual meeting but rather how to run a virtual meeting.
There are questions from both investors and issuers about how this format can facilitate good corporate governance while at the same time, allowing issuers to maintain control and ensure the meeting runs smoothly.
In a recent webinar and white paper, both hosted by Computershare, this topic came up.
There has been a perception that the virtual meeting format is a trade-off between either giving issuers the ability to kill the meeting or giving investors, both retail and institutional shareholders, the opportunity to hold company boards to account. Lumi’s view is that you can have your cake and eat it too. Both of these objectives can be accommodated through virtual meetings as well as positively impacted and improved.
In a virtual or even a hybrid meeting, it is possible to facilitate more sophisticated approaches to voting and discussion in an easy-to-manage way. The question for the industry is to reach agreement on what should be the best practice. This may be different from country to country but some of the principles will be universal. Computershare’s white paper looks at how virtual and hybrid shareholder meetings and AGMs are being adopted in different markets around the world. Lumi is the main provider in many of those markets to the world’s leading transfer agents, registrars and end users.
Additionally, in expansive geographies like the US, Canada and Australia, or even where there is cross-border ownership, there are also of course cost and logistical benefits. For the issuer, they are obvious – venue rental, catering, security, staging, as well as Board travel time. The same is true for other stakeholders, whether that be shareholders, proxies, guests or press. No longer is a whole day required to navigate one meeting; institutional investors for example can now ‘attend’ multiple meetings on any given date, especially given the seasonal nature of AGMs, and bypass travel time and the related expense. With mobile ownership now surpassing that of toothbrushes, the ubiquity of smart devices furthers that convenience – an AGM in your pocket, if you will. With an estimated 97% mobile ownership among millennials and Gen-Xers, is there also an opportunity to harness this technology to involve a typically hard-to-engage demographic in corporate decision making?
Lumi has decades of experience in providing digital tools to improve a whole range of meeting types and events. As well as providing for authentication, webcast access and proxy voting and balloting protocols, technology can enable the mainstay of shareholder meetings, the Question and Answer session, to be more interactive, improving the quality of the questions from a wider base, while at the same time giving meeting organizers the tools for moderation and control to ensure the orderly conduct of the meeting. Indeed, a physical-only meeting is limited in its demographic of attendance because of logistical and cost factors. Far from restricting discussion between shareowner and board, a virtual element can make the debate far more relevant and open. Warren Buffett for example has reporters moderate Q&A at his huge Berkshire Hathaway stockholder meeting, often dubbed Woodstock for Capitalists; couple that kind of innovative approach with broad-reach virtual technology, and the contention could soon be whether access and transparency, and thus good corporate governance, is actually hampered by a physical only meeting.
When we talk about our technology solutions at Lumi, we sometimes refer to “electronic voting,” and other times we use “online voting.” So what is the difference?
Electronic voting is at the heart of what we do. It involves moving from a manual paper-based or show-of-hands system to an electronic solution. This allows for better maintenance of the AGM voting procedures, including more accurate results, better tracking and analytics, and more secure and accessible processes. Electronic voting refers to the applications and technology used to facilitate the vote rather than the location of the participants, and it usually involves in-meeting technology like our dedicated handsets or kiosk voting solutions. AGM electronic voting solutions take traditional voting processes and make them more reliable, more accessible and more effective.
Online voting, however, is all about location. In virtual and hybrid meetings, participants need to be able to vote remotely, and online voting is the way that is facilitated. The background applications and processes may be the same, but the voting takes place online via web- or desktop-based applications instead of physical handsets or kiosks. It still offers the reliability and audit trail of electronic voting, but it happens in a different context.
Which one is right for me?
If virtual meetings are of interest to your organization, online voting is the way forward. However, for in-person meetings, electronic voting will allow you to create a more secure and reliable voting system for those in the room. For hybrid meetings, a truly hybrid solution offers both options for attendees, virtual and physical, and ensures that every vote is counted and processed the same.
To learn more about either of our digital voting solutions, or to learn how to combine the two to ensure accessible and effective hybrid meetings, click here to get in touch.
A new generation of investors is more aware of issues such as the importance of good governance, tackling climate change and addressing social issues. And they think that the businesses they invest in should play their part. Meanwhile, new rules give investors more influence over how companies are run.
Companies are under growing pressure to listen more to their investors and other stakeholders and take their views into account.
Companies need to respond to these changes and find ways to engage more with their investors. That means annual meetings are more important than ever as a way for shareholders and companies to talk to each other, but AGM voting procedures and other processes must be adapted to account for changes in expectations, both internal and external.
New digital technology allows you to do this more effectively, with virtual and hybrid meetings presenting one of the biggest opportunities in this area.
Virtual shareholder meetings (VSMs), which are becoming increasingly popular, are meetings where participants attend via an online platform that allows them to ask questions, vote and participate electronically in real time, as opposed to travelling to the physical meeting.
A hybrid meeting offers the option for remote participation alongside the physical meeting. This online option opens up your meeting to shareholders around the world who can’t attend in person preserving the ability of the shareholder to pose questions to the companies they own, while also making the meeting far more accessible to the vast majority of shareholders who are unable to attend physically.
Holding AGMs in one physical location can limit the engagement of that meeting.
With Lumi’s Virtual AGM technology, shareholders can log in to the AGM remotely from anywhere. They can watch proceedings, have their say and use electronic voting from the comfort of their own homes, in the office or while they’re travelling for business.
Virtual and hybrid meetings offer exactly the same transparency as an in-room meeting, ensuring that there is still a forum to hold the board to account. Virtual attendees can use tried and tested technology to ask questions and comment on proceedings. Written questions can be displayed to all attendees to promote further discussion, just as if a question was asked in person by a shareholder in the room, while it is also possible to allow attendees to ask questions live using speaker queuing technology. The tech also makes it easier and quicker to access records of the meeting.
In an era where meeting attendance has been in decline, the virtual or hybrid meeting can reignite enthusiasm among your shareholders, as well as increase transparency and accountability. Now is the time to take your meeting online.
One of the most common questions we get about Virtual Shareholder Meetings, or VSMs, is whether or not they are secure. When you bring your meeting online, whether strategically or as demanded by circumstance, cybersecurity moves to the top of the agenda.
However, cybersecurity concerns aren’t unique to virtual meetings. Anytime technology is utilized, security measures must be introduced to maintain the integrity of the attendees, the meeting and the activity that takes place. That’s why Lumi uses advanced cybersecurity measures to ensure the success of all its meetings, not just virtual ones.
Some of the measures we use to ensure the security of VSMs include:
As a shareholder, you would receive unique usernames and passwords, along with a secure authenticated login. This provides peace of mind that when you cast your vote or share your thoughts, they are upheld by the system so they can be counted and actioned accurately. You can also rest assured that no unauthorized attendees can disrupt the proceedings or access the results and feedback.
Our priority is creating secure, reliable applications and platforms. These work to uphold the important processes that comprise successful shareholder meetings and make it easier to follow up on shareholder input. To learn more about Lumi’s cybersecurity features and protocol, click here to contact one of the Lumi team.