Outcome: Successfully withdrawn after the company discontinued plans to conduct shareholder meetings exclusively online.
Intel has announced that it is discontinuing its physical stockholders meeting in 2010 and will hold the meeting online.
We strongly support the use of new technologies to make annual meetings accessible to stakeholders who cannot attend in person. This will make “attendance” simpler for investors globally and is a creative tool for expanding outreach to owners.
But we do not believe that Internet-only meetings should be substituted for traditional in-person annual meetings. Instead, they should be a complementary. We believe the tradition of in-person annual meetings plays an important role in holding management accountable to stockholders.
In contrast, online-only annual meetings could allow companies to control which questions and concerns are heard and manipulate the exchanges between shareowners and the company. Face-to-face annual meetings allow for an unfiltered dialogue between shareholders and management.
The Council of Institutional Investors, a coalition of America’s largest pension funds with portfolios valued over $3 trillion, has among its published corporate governance guidelines for effective governance of public companies, “Cyber meetings should only be a supplement to traditional in-person shareholder meetings, not a substitute.”
Additionally, we believe in-person annual meetings are necessary for several reasons:
- Annual meetings are one of the few opportunities for top management and the Board to interact directly, face-to-face, with a cross section of their shareholders.
- The digital divide persists in the United States and not all shareholders have access to computers.
- Annual meetings provide for direct questions to be posed to the Chair of the Audit, Compensation or Governance Committees of the Board.
- While some corporations argue that eliminating the face-to-face annual meeting is a way to reduce costs and improve efficiency, we believe the investment in creating a physical space for shareholder meeting is money well spent.
- We believe Intel’s decision is a controversial one for a company with a positive reputation on corporate governance. This decision sets a precedent and creates a “slippery slope” that will encourage other companies that desire to insulate themselves from shareholders to follow suit. Imagine a company that wanted to downplay investor frustration over compensation policies or practices, or poor business decisions leading to substandard financial performance, or questionable governance or environmental records: “virtual” online meetings would be a perfect way to insulate themselves from shareholder interaction or to “spin” any opposition as insignificant.
- In addition, if there was a major crisis with a company or a merger being proposed, the last thing investors would want is a company’s refusal to hold an actual stockholder meeting.
Shareholders request that Intel adopt a corporate governance policy affirming the continuation of in-person annual meetings in addition to internet access to the meeting, adjust its corporate practices accordingly, and publicize this policy to investors.