Questions, and Directors, Lost in the Ether

by Gretchen Morgenson for The New York Times, September 25th, 2010.

Annual shareholder meetings may not be the most efficient occasion for managers to meet with the owners of the companies they run — they can be hard for shareholders to get to and are sometimes hijacked by gadflies with personal agendas and long-winded, irrelevant questions. Because most, if not all, shareholders cast their votes before the meetings even take place, they can feel ritualistic and not terribly meaningful.

Yet, these congregations do give shareholders a rare opportunity to take the measure of the managers and directors who are supposed to work for them. How executives answer questions that shareholders pitch at them can be very revealing.

As long as investors get a chance to ask their questions, of course. Which brings us to a curious phenomenon known as the virtual annual meeting.

Given that the Internet has made digital get-togethers ubiquitous, it was only a matter of time before large corporations began suggesting that in-person annual meetings be replaced with online-only gatherings. The benefits are obvious: efficiency and ease of participation, for example.

But some investors fear that ether-only meetings will allow managers to hide from shareholders, evade their questions or otherwise dismiss their concerns. And they are pointing to the shareholder meeting last Monday of the Symantec Corporation as an example of why their concerns have merit. (continue reading… )


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