By Jeremy Daniels – Jeremy.Daniels@EthicalBoardroom.com
The annual general meeting is a vitally important event for investors, as it provides a forum where the significant aspects of corporate and financial performance of the company are shared and deliberated. It is even more importantly the place and time at which a number of strategic decisions, which will affect the company direction and future growth, are approved. These discussions and decisions are crucial for investors in consideration and development of their long term returns on investment. For minority shareholders, these meetings are often the only opportunity to obtain information directly about the company’s specific operations and question the management of the company regarding specific organisational workings. The benefits that can result from increased shareholder participation in the matters of a company and its future direction can be enhanced through maximising attendance and this can be facilitated through video conferencing.
Companies across the globe are increasingly being allowed to hold annual general meetings through the method of video conferencing. The reasoning behind this new mode of meeting has been to facilitate wider shareholder participation. Furthermore, the adoption of video conferencing can lead to reduced costs for shareholders wanting to attend annual general meetings.
Although there are benefits to video conferencing for annual general meetings there are also a number of challenges to overcome which has led many industry experts wondering if video conferencing will be widely adopted or pass by as a mere fad. The logistics can be costly in terms of time, money and effort and may lead to low levels of adoption of this new mode of participation.
When carrying out the video method of meeting, a company will send a prior notice to shareholders informing them about the availability of meeting participation through a video conference set up. The company will at this stage provide the necessary information to enable shareholders to access the video conferencing facilities available.
It is critical that when adopting this technology that the Chairman and Secretary of the meetings take measures to adequately protect the integrity of the meeting via videoconferencing. They will need to ensure that proper video conference facilities and full preparation of the minutes of the meeting takes place. A further challenge will be to ensure that no party other than the relevant shareholders or proxy parties for the shareholders attends the meeting through electronic means.
Additionally, a key measure to maintain the effectiveness of video conference-based participation of shareholders is that if participant statements in the meeting are interrupted or disrupted through the technology then the Chairman of the meeting or Secretary will need to request for a repeat or reiteration. Further to this the Chairman or Secretary may need to repeat what was heard from the participant for confirmation or correction. These challenges can waste a lot of time and effort in the meetings if frequent pauses need to be made for each participant, which is why it is still uncertain as to whether wider adoption of video conferencing will take place.
The main benefit of this facility is wider shareholder participation – in particular video conferencing will allow shareholders residing at different and distant geographic locations to participate in meetings. Despite its challenges it appears at this time that the use of a video conference is one of the best options for improving shareholder involvement when geography is a problem. Video conferencing allows face-to-face interaction amongst the various parties at different locations and this mode has been widely and successfully adopted for shareholder meetings in some markets such as India, Hong Kong, the US, and Denmark. Maximum shareholder participation can be facilitated through the use of video conferencing with a number of benefits – it provides a modern means of communication that is quick, efficient and cost effective in the long run that connects parties globally.
Photo Accreditation – Ted Eaton
