challenged this status quo , championing shareholder rights and “ people ’ s capitalism .” By the 1960s , meetings became livelier forums for discussion , yet their effectiveness was questioned , prompting calls for innovations like voting by mail . From 1980 to 2010 , the rise of institutional ownership — pension funds , mutual funds and the like — shifted the power dynamic away from individual shareholders , yet the annual meeting persisted as a symbolic gathering point .
The spectacle of meetings such as Berkshire Hathaway ’ s or Walmart ’ s annual events — drawing tens of thousands — epitomized the enduring allure of face-to-face interactions between shareholders and management . However , the digital revolution introduced new dynamics . By 2005 , companies like Cisco Systems were integrating live digital feeds , and by 2016 , hybrid models — like Berkshire ’ s live-streamed inperson meeting — were taking shape .
The COVID-19 pandemic catalyzed an industry-wide pivot . Virtual-only meetings became essential as legal frameworks adapted to enable digital shareholder interaction . Companies reported record participation , thanks to the convenience and accessibility of virtual formats . Advocates tout cost efficiency , broader reach and inclusivity , especially for institutional investors managing diverse portfolios .
Yet , virtual-only meetings are not without detractors . Critics highlight the loss of spontaneous , unmoderated exchanges and worry that digital platforms allow management to sidestep tough questions . To counteract these challenges , companies have adopted strategies like pre-submitting questions and independent moderation to maintain engagement . Hybrid models , blending physical presence with virtual accessibility , are emerging as the gold standard — combining the personal connection of traditional meetings with the inclusivity of modern technology .
As companies refine these formats , the hybrid approach seems poised to dominate , ensuring annual meetings remain meaningful forums for shareholder dialogue in an increasingly digital world .
Shareholder Engagement : Beyond the Meeting Room
As shareholder meetings have evolved with technological advancements and changes in governance dynamics , so too
Investors ’ Environmental , Social Bids Rise Number of anti-ESG proposals also increase , peak in 2024
Sustainability Governance
has the landscape of shareholder engagement . A notable development in this shift has been the increasing frequency of private interactions between institutional investors and corporate boards , particularly since 2010 . These private meetings , often focused on critical issues such as executive compensation , governance practices and long-term strategic direction , have reduced the traditional demand for large , public-facing annual meetings .
With institutional investors now controlling a significant majority of corporate equity , the emphasis on the annual meeting as the primary forum for shareholder dialogue has diminished . In many ways , this reflects a broader trend : shareholder activism , especially in areas like ESG ( Environmental , Social and Governance ), has contributed to the perception that annual meetings may no longer be the most effective means of engaging shareholders . Instead , private discussions between institutional investors and management have become more commonplace , facilitating more direct and frequent exchanges on issues of concern .
However , this shift raises important questions about transparency . While private engagements allow for deeper discussions , they also pose risks when it comes to selective disclosure . Regulation Fair Disclosure ( Reg FD ), enacted in the early 2000s , was designed to ensure that all shareholders had equal access to material non-public information . As a result , even though institutional investors may have
Social Environmental Anti-ESG
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Source : ISS-Corporate Note : 12-month periods from July 2015 to June 2024
Shareholder proposals have become an increasingly common and contentious means of influencing corporate policy .
more frequent contact with management , the information shared in these settings is often limited to what is already publicly available , reducing the potential for these private dialogues to lead to more impactful or exclusive insights .
The Rise of Shareholder Proposals : From Stagecraft to Strategy
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If the annual shareholder meeting has evolved into a digital forum , shareholder proposals have undergone an even more profound transformation , shifting from public confrontation to strategic negotiation .
Historically , annual meetings were critical venues for debating and voting on shareholder proposals . Rooted in state laws allowing proposals with a “ proper corporate purpose ” and bolstered by SEC rules since the 1940s , these proposals often addressed not just corporate governance but broader social concerns . In the mid- 20th century , activists used meetings as public stages to spotlight causes ranging from racial equity to environmental protection . The direct , face-to-face confrontations between activists and executives generated headlines and public pressure , with companies frequently resisting such proposals to avoid negative attention .
Over time , the landscape shifted . From the 1980s onward , proposals became potent tools for shaping public debate , not just within the meeting but through the broader media ecosystem . By the 2000s ,
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www . MoAF . org | Winter 2025 | FINANCIAL HISTORY 37