Here’s the latest new normal in the age of the coronavirus: virtual shareholder meetings.
Johnson & Johnson, Amazon, and Domino’s are just a few companies that will host their first virtual-only shareholder meetings in the coming weeks, while Starbucks held its online meeting last month. As we speak, investor relations departments are grappling with such logistical questions as whether the meetings should be video or audio and how shareholders will get to ask questions.
Though some major companies were already hosting virtual meetings—Microsoft announced its shift to remote meetings in October—the widespread shift has prompted worry that remote meetings will be permanently adopted, reducing the opportunity for activists to stage protests, and allowing companies to thwart shareholders’ questions and conversations with executives on difficult topics.
So far, companies have widely opted for audio-only, which further cuts down on shareholders’ ability to speak with executives face to face. Most public companies already host quarterly earnings calls with investors and press.
Some states, such as Delaware, have long allowed virtual shareholder meetings, while others, including Georgia and South Carolina, ban them altogether. States such as New York and North Carolina allow hybrid meetings (both virtual and in-person components). Many states, including New York, have temporarily suspended those laws during the pandemic.
Adding to the hustle, many companies’ own bylaws ban virtual meetings, leaving boards and corporate lawyers scrambling to amend their corporate governance guidelines. The National Law Review suggests the following bylaw wording: “shareholder meetings shall be held at such place or no place, or may be held solely by means of remote communication.”
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