Technology has generally opened up more avenues of communication and information for consumers. While it has greatly improved access to information for shareholders, technology has also served to deprive them in certain ways. This is especially true of virtual shareholder meetings that are becoming more and more popular.
Virtual shareholder meetings are not held in a physical location. Rather, they are done through a conference call and occasionally have an online slide show. For example, Boston based investment firm State Street Capital hosts their annual meetings in a local hotel. Meanwhile, furniture e-Commerce firm Wayfair holds all of their meetings online and through a conference call system.
Shareholders and analysts are permitted to dial into the conference call and listen to updates from the executive officers. On the positive side, shareholders can clearly hear what the officers are saying and follow along with the charts and graphs being presented.
However, there are a few critical downsides of virtual meetings. The most important is that the company can choose questions they want to hear and censor the questions that they don't. They can present a cheery picture to the public and completely avoid the tough questions they don't want to answer. By monitoring the incoming calls, the company can deliberately choose friendly or pre-screened questions. Public hearings do not permit this type of censorship because anyone can stand at the microphone and ask questions.
Virtual shareholder meetings also do not permit the shareholders to meet and converse with executives. The one on one time can be crucial for some shareholders to make a decision whether to continue putting their savings into a company. While large institutions can still get meetings with executives, individual shareholders do not have that capability. That is why public shareholder meetings are so important to these small investors. Unfortunately, technology is eliminating this opportunity.