May 22, 2023
Virtual Meetings: Enhancing the Transparency of Your Q&A
In a recent Soundboard Governance blog, Doug Chia notes the top investor complaint with VSMs is the possibility that companies may be gaming the Q&A session by “cherry picking” the questions they answer in order to avoid the hard ones. The blog compares the different ways that two companies – “Hatfleld” and “McCoy” – handled their virtual annual meetings, and says that Hatfield did a pretty good job when it came to the transparency of its Q&A session:
It’s essential for companies to show its investors during the VSM Q&A session that they are trying to be as transparent as possible. One way Hatfield did this was by having all questions come in live by phone and letting each caller speak once their line was opened by the operator, like they do on talk radio. Based on the questions I heard, it didn’t seem like the company was screening the calls. (One caller opined that the entire accounting profession is a fraud!)
The members of management answered the questions on the spot in a way that didn’t sound scripted. Some of those answers were less than satisfying, but that’s going to happen whether the meeting is in-person or virtual-only. Another way Hatfield tried to convey transparency was by stating in its proxy statement that they would post answers to any pertinent questions not addressed during the Q&A session on their website sometime after the meeting.
The blog acknowledges that the limitations of the VSM format make it difficult to fully address investor concerns about the Q&A session’s transparency, but says that Hatfield handled investor Q&A much better than “McCoy” – which dealt with two questions that Doug submitted so poorly that he no longer feels skeptical about investor concerns that some companies are gaming the Q&A session at VSMs.
Doug’s blog is worth reading by anyone involved in planning a VSM, but I do have one minor quibble that may reflect the fact that Doug’s a bit younger than I am. He chose to use Hatfield & McCoy as pseudonyms for the two companies that served as his examples of good and bad VSM practices – but I think any of my fellow boomers would’ve seen Goofus & Gallant as the more obvious choice!
– John Jenkins