May 24, 2018

Annual Meetings: Ban the Press?

Some companies decide to ban reporters from their annual meetings. The risk in doing this is that it backfires and draws even more negative publicity. Here’s one example of negative press due to a ban – and this MarketWatch article looks at another recent uproar. Nell Minow is quoted:

It’s not unusual for companies to say that meetings are for shareholders only. But I think that it’s best practice for them to allow press in so that shareholders who can’t be there in person can learn about the sole opportunity shareholders have to see the board and executives in person – how they present themselves when they control the process, and how they respond to questions when they do not. If the answer is cutting off access to the press, the obvious question is, what are they trying to hide?

Our “Checklist: Annual Meetings – Dealing with the Press” outlines logistics to think about if you want media coverage at your meeting – or if you don’t. It also considers the possibility of using rules of conduct to limit the type of coverage – e.g. a ban on recording devices. But this article shows that those types of restrictions should also be handled carefully.

Poll: Dealing with Media at Annual Meetings?

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Annual Meetings: Be Consistent With Your Admission Policies

It’s always smart to be consistent when restricting shareholder attendance at your annual meeting. Some companies require beneficial holders to show proof of ownership in order to gain admittance. But if you’re going to use that as a means to prohibit people from being admitted, it can be risky to make exceptions in exchange for a vow of silence.

This article highlights that risk – here’s an excerpt:

After the attorneys summoned security guards to physically block Danhof from the meeting room – and threatened to call the police – Danhof gave up and opted to file a complaint with the SEC. He had begun to suspect that the situation involved more than a simple miscommunication when the company offered to let him attend if he didn’t make any comments or attempt to address the meeting.

“That leads me to believe that they did some quick research, they figured out I was there, that I was an activist investor, that I ask tough questions and put CEOs on the spot, and they wanted to do whatever they could to make sure their CEO didn’t have to answer the question,” he said.

Liz Dunshee