How Shifting from In-Person to Virtual-Only Shareholder Meetings Affects Shareholders’ Voice

Shareholder meetings are one of the only opportunities for most investors to interact directly with management. Due to COVID-19, however, shareholder meetings have moved to a virtual format. Analysis of transcripts and recordings of in-person and virtual shareholder meetings in 2019–2020 shows that, relative to in-person meetings, the overall time of virtual meetings is 18% shorter, and 29% less time is spent by firms on answering each question. These findings indicate that communication between companies and shareholders is more limited at virtual meetings. To examine if shareholders face challenges in their attempts to increase such communication in virtual meetings, I construct a dataset on shareholders’ attempts to submit questions to virtual shareholder meetings and document several tactics firms use to avoid addressing them. For example, firms explicitly state that no (additional) questions were submitted, whereas I document that multiple questions were submitted by shareholders, but were ignored. Finally, a mechanism that imposes severe restrictions on shareholders’ ability to submit questions at virtual shareholder meetings is uncovered: the use of a non-Broadridge platform to broadcast the meeting. Overall, the paper documents that with regard to 55% of the firms to which shareholders attempted to submit questions, shareholders faced obstacles. The paper concludes with policy recommendations on how virtual shareholder meetings can be designed in ways that foster communication between management and companies. Presentation of paper is available at this link: https://www.youtube.com/watch?v=vjp6VcISqDE&feature=youtu.be