Contact us with your California corporate & securities law questions (949) 353-6347 or Contact us here

California And Virtual Annual Meetings

Seventeen years ago, Delaware amended Section 211 of the Delaware General Corporation Law to permit corporations to hold electronic meetings of stockholders.  72 Del. Laws, c. 343, §§ 7, 8.  In the ensuing years, an increasing number of corporations have elected to conduct their meetings either entirely (a "virtual meeting") or partially (a "hybrid meeting") through electronic means.  Broadridge Financial Solutions, Inc., a purveyor of online meeting solution, reports that nearly 200 companies held electronic meetings of shareholders this year.

Electronic meetings offer a lot of advantages to society, shareholders and corporations.  From a societal perspective, they lessen traffic because shareholders do not need to travel to the meeting.  Consequently, they also reduce carbon emissions through reduced travel.  Shareholders also benefit in terms of terms of savings in cost of travel and time.  In theory, these savings should encourage, not discourage, shareholder participation. Corporations save money through reduced costs of meeting room rentals, security and management travel.

Despite these numerous and manifest benefits, some shareholders vehemently oppose online meetings, especially if they are virtual meetings.  The Council of Institutional Investors, for example, has adopted the following policy:

4.7   Electronic Meetings:  Companies should hold shareowner meetings by remote communication (so-called "virtual"meetings) only as a supplement to traditional in-person shareowner meetings, not as a substitute.

Companies incorporating virtual technology into their shareowner meeting should use it as a tool for broadening, not limiting, shareowner meeting participation. With this objective in mind, a virtual option, if used, should facilitate the opportunity for remote attendees to participate in the meeting to the same degree as in-person attendees.

California Corporations Code Section 600(e) explicitly authorizes meetings to be conducted, in whole or in part, by electronic transmission by and to the corporation or by electronic video screen communication.  However, widely held California corporations, as a practical matter, will not be able to conduct virtual meetings.  The reason is that the statute requires the corporation to hold a meeting at a physical location absent receipt of consent from all shareholders to the electronic meeting.

 

Share on:

Section 211, virtual annual meeting, Corporate Governance, Broadridge, CII, consent, Council of Institutiona Investors, Delaware General Corproration Law, hybrid annual meeting, Section 600(e)

ANY QUESTIONS REGARDING CALIFORNIA CORPORATE AND SECURITIES LAW? CONTACT US DIRECTLY

We offer expert advice with the intricacies of California law.

Our years of experience and expertise allow us to help clients navigate the business laws in California.

CONTACT US

Get the latest news and analysis about California Corporate & Securities law. Subscribe to our newsletter today!

We respect your email privacy

ABOUT OUR AUTHOR

30172DBAB0084D3A8F39D7AF0A8E79BC.ashx Keith Paul Bishop
Partner at Allen Matkins
(949) 353-6328
 Contact me
Learn More About Keith

nominee-badge

Get the latest news and analysis about California Corporate & Securities law. Subscribe to our newsletter today!

We respect your email privacy

CATEGORIES

see all

RECOGNITION

YOUTUBE

FACEBOOK