Remote enterprise meetings have been around for a while now, especially with the advent of the COVID-19 pandemic necessitating a switch to virtual meetings.
However, who could forget when the business world went abuzz in 2015, when Hewlett Packard (HP) announced on Feb. 4, 2015 that its annual shareholder meeting (held on March 18) would be a purely online event. HP was the largest organization at that time, to host a virtual annual shareholder meeting. Back then, people in the business world were rightfully wondering if this move was an incoming trend among major companies.
Reception to HP’s Virtual Annual Shareholder Meeting
One would think that the news was met with excitement because of what it had meant for meeting technology. However, the reaction in general to HP’s decision was strongly negative. There were concerns over HP’s supposed ulterior motive, one of which was to keep its CEO, Meg Whitman, far away from investors demanding transparency from the company.
This led to some pressing questions on the back of many people’s minds during that time: If HP can get away with it, will other CEOs also use remote or virtual meetings to prevent direct confrontations with investors? Will remote meetings become a means to shirk responsibilities for business leaders? Shouldn’t technology open more avenues for communication, and not limit it?
During that time, organization’s would have had a second thought in thinking of transitioning to an online annual shareholder meeting for reasons such as cost savings, streamlined processes, productivity, and efficiency.
Back then, the last thing that was wanted by companies when choosing to hold an online annual shareholder meeting was for people to think that its organization’s leaders are hiding from investors. During that time, all of their concerns and grievances can be considered valid.
However, people at that time should have considered the situation HP was in during the year.
HP in the Hot Seat
Prior to its annual shareholder meeting, HP had already been in the center of multiple issues that needed to be addressed, such as its close ties to Israel, failed settlement deals with investors over the botched Autonomy Corp. acquisition, and separation into two companies named HP Inc. for personal computers and printers division and Hewlett Packard Enterprise (HPE) for corporate computing and IT services.
Given how vital these issues were, it was only natural for investors to want an open forum where they could freely ask and confront Whitman with hard questions and scrutinize her answers under tremendous pressure. Accordingly, this was taken away from them when HP limited the participants’ reach by asking them to submit questions online before the meeting with an almost unfair screening process.
During that time, this was where the problem lied. It’s not the meeting technology that people found concerning, but the way and context with which it was implemented.
Better Execution Should Have Been Done
HP spokesperson Sarah Pompei said during the controversy that, “This move will allow for increased stockholder attendance and participation as well as increased communications with our stockholders via pre-meeting forums, surveys, and other materials. At the same time, it will enable cost savings for both HP and our stockholders.”
This was itself a valid reason. Holding a virtual annual shareholder meeting has proven to be a cost-effective venture and have actually increased communications, especially during the recent times of the COVID-19 Pandemic.
However, HP could have eased the transition especially during that time when virtual annual shareholder meetings were not popular. it could have made more apparent that it was not their intention to shortchange its investors in the face of controversies.
A hybrid AGM could have been done during that time, where they could have still held a face-to-face meeting for investors who could physically make it to the venue, and then hold a simultaneous webcast for those who were unable to do so. Questions could still be sent online before the meeting to give Whitman time to prepare her answers. This shouldn’t have just been the reason to avoid facing shareholders and remove the need for a face-to-face meeting, especially when investors were clamoring for it.
It could be said that the timing for HP’s decision to go with an online shareholders meeting during that time was just not right.
Botched Deals, War Crimes, and Company Splits
HP had decided to go for an online annual shareholder meeting even with the issues of the company at that time still being left unresolved.
Accusations against HP for aiding Israeli war crimes were going strong, with the Palestine Solidarity Campaign by British British pro-Palestine campaigners having called upon HP to terminate its “complicity” in the form of supplying “the technology behind Israel’s war crimes and apartheid against the Palestinians.” At that time, the company had yet to address these allegations, which go against its public commitment to corporate social responsibility.
As for the company split then, it’s was just the beginning and understandably, investors felt uncertain about where it was all heading. Although Whitman said that “Separating HP into two companies is absolutely the right next step to build on our reputation as Silicon Valley’s founder,” she also acknowledged the fact that the separation would produce some changes particularly for its partners.
The annual shareholder meeting would have been a good time for investors to discuss with Whitman what these anticipated changes could mean to operations, it was a prime opportunity.
Important Lessons from the HP Backlash
HP pushed through with the virtual annual shareholder meeting amidst the backlash with meeting itself being a success. With such a big company paving the way in spite of the odds, it was then that many expected others to follow suit.
When looking at it in perspective, it was not necessarily a bad thing that had happen. Meeting technology is a tool, and organizations can decide how to use it. For HP, the decision might not have been the best given the circumstances it was in during that time being embroiled in numerous controversies. It could have been a coincidence, could be not, but whatever HP’s real intentions were for going online during that year, investors had reason to feel that the company was putting limitations on their communication lines.
Other organizations would have learn a thing or two from HP. The annual shareholder meeting happens only once a year, so its importance is evident as it is the one chance investors have to communicate directly with the CEO about major matters regarding a company’s performance.
Technology of Virtual Annual Shareholder Meetings
It is important to realize that meeting technology is actually very beneficial. However, companies should still take precautions and care when using implementing this kind of technology. it should be clear that their use of technologies such for virtual AGMs support the right of investors in remote locations to be given the opportunity to interact with the CEO.
Meeting technology was not the negative here — it was the circumstances and execution that made the difference. As always, for any kind of meeting, it’s important to listen to what participants want. With proper implementation of meeting technology, digital solutions can cater to meet investors needs and make the online experience a productive one.
With most companies having had the necessity to do virtual or online annual shareholder meetings due to the COVID-19 Pandemic, it has been proven that this type of technology has brought benefits and is a viable tool for both boards and shareholders.
HP’s use of a virtual annual shareholder meeting was a signal that times were changing and that in a few years time, meeting technology would become an avenue for important company meetings and operations.
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ConveneAGM is one of the leading virtual AGM solutions available in the market. It has helped service over 200 listed companies, clubs, and membership associations to prepare and hold their online or virtual annual shareholder meetings.
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