It’s that season again – no, not just baseball – annual meeting season. Public companies across America are conducting these events to elect a board of directors, make critical decisions regarding the organization, and inform shareholders of previous and future activities. Equally as important as these objectives is providing a forum for shareholders – the owners of the companies – to ask questions about the direction of the business, raise issues and concerns, and get answers from company leadership. This interaction is a crucial aspect of a successful stakeholder engagement process.
But something is changing on the annual meeting front. According to an article in The New York Times, an increasing number of companies are moving to an online-only format for engaging shareholders in their annual meetings.
How Are Online Meetings Impacting the Stakeholder Engagement Process?
There are arguments for and against these virtual meetings. “Companies can use technology to be open and transparent with their stakeholders or they can deploy it to go underground,” says The New York Times.
Those defending the practice say it allows shareholders who might be located all over the world to participate in annual meetings. Opponents have expressed concern that it allows shareholder questions to be selectively addressed and prevents corporate leaders from being as accountable as they might be at an in-person event.
Shareholders, a key stakeholder group, want to and need to trust the companies they are investing in. That’s why engagement between companies and their investors is a critical business practice. The stakeholder engagement process starts with listening to those impacted by the decisions and actions of an organization and then having ongoing, open dialogue to stay up-to-date on their expectations.
What many companies fail to realize is that engaging doesn’t mean having to “give in” to every shareholder request. One desired outcome of the stakeholder engagement process is to create a collaborative environment in which organizations and their stakeholders work together on a common issue to develop a possible solution.
A Role Model Example – Meeting Stakeholder Expectations (and Then Some)
One company that I think does right by its shareholders is Berkshire Hathaway. In 2016, the company’s multi-day annual meeting included a cookout, a 5K run and a five-hour question-and-answer session with CEO Warren Buffett and Vice Chairman Charlie Munger. Interestingly, the meeting also was live-streamed for the first-time. The company was able to involve investors all over the world and its five-hour Q&A demonstrated that company leadership was clearly not “going underground.”
Maybe some in corporate America should be taking heed of Warren Buffet’s advice, “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things different.”
Striking a balance between transparency and accessibility for all shareholders encourages constructive dialogue about business issues and solutions – and should be the goal of all annual shareholder meetings. It’s an excellent way for companies to protect their reputations – their most important asset in every season.
Do you want to learn more about how to engage authentically with your stakeholders? Download our white paper here.