It's not yet corporate annual meeting season. That will come in late April through early June. But it is time for companies to start envisioning and planning their 2023 meetings before things get crazy with year-end compensation approvals, annual reports, proxy statements, 10-K filings, earnings releases, and everything else that I don't miss about being a corporate secretary during crunch time in February.
Not Going Back
Based on the data I've seen from service providers, the tide of US public companies that moved to virtual-only annual meetings starting in April 2020 remained very high in 2022, even after pandemic restrictions were lifted. Some companies (e.g., Travelers) did go back to meeting in person, but it was not a meaningful enough wave that would lead me to think that there will be a major retreat in 2023 or thereafter. Companies want to go back to in-person shareholder meetings like tech workers want to go back to the office five days a week.
Quality
Unfortunately, on the whole, the quality of VSMs hasn't gotten much better since the VSM tsunami of 2020. They continue to be short (average duration has been dropping at a steady clip to well under 20 minutes), perfunctory, and boring. They are almost always audio-only (percentage of companies that used video in 2022 was still in the single digits), with minimal use of imagery or multimedia content, bland management presentations containing no new information, and limited Q&A.
One positive development is that more companies are posting replays, transcripts, and written Q&A after their meetings. But the live experience isn't much different from the VSMs that I covered in 2020 and 2021.
The "Perfect" Meeting
If I put together the good things that I've seen over the past three years, I realize that companies can create what I would consider a worthwhile experience for its shareholders without much extra cost, effort, or potential for complications. Here is what the "perfect" VSM would look like, at least by today's standards.
The meeting would open with a video of the board chair or lead director welcoming shareholders to the event where the person is actually on screen moving their mouth. Here's a frame from Intel's 2022 meeting where the chairman did this, probably from his home. (Notice the closed captioning for the hearing impaired.)
It would then move into the formal portion of the meeting with the general counsel and corporate secretary conducting the business required by law. (Notice the signing for the hearing impaired.)
The meeting would borrow from Microsoft's example and and play video and audio recordings provided by the shareholder proponents to introduce their proposals. (By the way, take a look at the text of John Harrington's statement to introduce his proposal. The man is quite the poet!)
(Once all proposals have been presented, it might be time for what I would call the James McRitchie 10-minute voting/bathroom break before closing the polls.)
After all of the formal items of business are completed, the CEO would come on to discuss noteworthy developments in the company's lines of business.
Part of this would include using video content to showcase stories around products, services, customers, and employees. Most companies have plenty of this type of material that gets used at internal events like employee town halls and sales team meetings and can be repurposed for any type of audience. Here's an example of how Disney did this in 2022. It's a snapshot from a short clip of an interview with Lin-Manuel Miranda talking about his work on the movie Encanto.
Disney also did something this year that absolutely blew me away. They showed a never-before-seen trailer for a new streaming series being added to the Star Wars canon!
If you know anything about Star Wars (and Marvel) fanboys and fangirls, the release of a new trailer is itself a major event, with millions streaming it and showing all of their friends (and parents) immediately after it drops. And to think that Disney would have a big reveal of the Obi-Wan Kenobi limited streaming series on Disney+ during its annual meeting... wow! It ended up receiving 7.4 million views within 24 hours of the annual meeting and was the number one trending video on YouTube!
I've been harsh on Disney over the years for having the most disappointing VSMs when you consider the amount of amazing content they have to pull from. But they came through in a big way this year, doing exactly what I've been telling companies to do: Give people a reason to watch. Disney did, and people on social media responded. Kudos to Disney!
After discussing the business and showing off products, other members of the board and management would join the CEO to discuss current issues facing the company. Take a look at how Microsoft showed their lead director, CFO, CEO, president, and head of investor relations sitting down for a thoughtful, unscripted conversation to respond to questions they received before and during the annual meeting (screen shot is from the 2021 meeting). This year, the subjects they covered included ESG, cybersecurity, corporate purpose, and the company's planned acquisition of Activision Blizzard.
As is customary, the meeting would end with a live Q&A session. The company would field questions that came in prior to and during the meeting and during the Q&A session, as we see Intel's CEO doing here in real time.
And here is a snapshot of Disney's then-CEO, Bob Chapek, making a statement before the Q&A started about the controversy around his previous public statements on Florida's "Parental Rights In Education" (a.k.a., "Don't Say Gay") legislation. Chapek used the moment right before the annual meeting Q&A session to frame his message on a corporate controversy to a captive audience of the company's shareholders. What better way to use this primetime slot?
During the Q&A session, the company would also take questions from live callers, talk-radio style, as Procter & Gamble did again this year.
After the meeting is over, the company would post a replay, transcript, and written answers to questions that they didn't get to during the meeting. Here's a snapshot of what General Motors posted after its 2022 annual meeting.
The Value Proposition
So there you have it: the building blocks for a virtual annual meeting worth the price of admission. Like I said before, this should not be super difficult to pull off. It just takes a some imagination and coordination. But why bother? What's the value proposition? It comes down to these simple concepts that are hard to argue against:
Building your corporate brand
Marketing your products and services
Developing trust with your shareholders
Generating votes in your favor
You have to have this meeting anyway, so do something useful with it!