As annual meeting season approaches, it is time again to consider whether businesses will soon shift to a fully-virtual format. Online-only and hybrid meetings have been occurring for years; however, 2020 is the first year that companies may be forced to cancel their in-person events altogether.
Over the last few weeks, concerns over the global spread of coronavirus have prompted some large companies to switch their annual meetings to virtual-only formats. These companies include Facebook, Nvidia, Alphabet, and, most recently, Starbucks.
In early March, Starbucks released a statement announcing the change, writing that: “Due to the emerging public health impact of the coronavirus outbreak (COVID-19) and to support the health and well-being of our partners and shareholders, please note that the location of the Annual Meeting of Shareholders has been changed and will be held in a virtual meeting format only. You will not be able to attend the Annual Meeting physically.”
The sudden shift towards digital-only meetings is understandable. Few companies would want to risk spreading contagious disease through a crowded venue when a remote meeting option is available. The circumstances are very unfortunate — however, this annual meeting season will also give companies that typically hold hybrid or physical meetings a chance to test a virtual-only format. It will be important to get input from shareholders, too.
The annual general meeting has been an SEC-mandated staple in business for decades. During these once-yearly events, shareholders are invited to discuss recent business developments, engage with company leaders, nominate directors, and vote on pending matters. These gatherings often are very predictable, with clear, pre-established administrative agendas and talking points.
Historically, annual meetings have primarily been in-person events. Most are simple affairs, held in company offices and hotel event spaces with very limited attendance. I have attended several annual meetings of (even) Fortune 500 companies with zero shareholders, other than directors and employees, present.
Berkshire Hathaway’s annual meeting, more a yearly extravaganza, is unique. Last year, the company’s annual meeting drew over 40,000 attendees to Omaha for a three-day-long calendar of events that included the meeting, a picnic, a five-kilometer run, and shopping opportunities. “The crowd filled an arena and several overflow rooms to hear revered investors Warren Buffet and Charlie Munger answering questions,” one reporter for the Fort Worth Business Press wrote of the 2019 meeting.
Berkshire Hathaway reportedly intends to hold its usual festivities this year. However, the New York Times recently reported that the company is considering scaling back some events if the coronavirus threat remains. The company plans to continue a four-year trend of live streaming its annual meeting through Yahoo Finance, too.
There are a few reasons for the typical lack of attendance at annual meetings. While annual meetings once stood as shareholders’ only opportunity to interact with company leaders, quarterly conference calls, industry conferences, and more recent shareholder-management communications have lessened the annual meeting’s importance for shareholders. Some would-be attendees may choose to stay home because of the expense and time involved in attending the event. Others …read more
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