Educate Shareholders on How Elections Work
Setting the Stage
Boards need to know that there are ways to avoid adverse annual meetings. Shareholders may feel disenfranchised at annual meetings when they’re unable to have their names placed on a ballot. Or they simply may not understand the process from beginning to end.
We have taken over buildings, and we have discovered that sometimes the boards themselves may, in fact, be disenfranchising individuals. We figured out that a simple way to avoid an adversarial annual meeting is to inform – and in some cases, educate – the shareholders about the hows and whys of this important gathering.
Following the Action
To that end, we put together an annual meeting handbook. We distributed it to all of the shareholders two to three months before we all assembled and discussed how the meeting and election process should run. The book describes what the agenda and a typical proxy form look like, the process of delivering a proxy, and an explanation of how the system works.We’ve also been proactive in requesting that, if any shareholder is interested in serving, he or she should submit his or her name, and perhaps a résumé some time before the meeting. That would allow us to actually place their name on the ballot and inform other shareholders of their interest.
Doing It Right
We’ve had good results so far, minimizing any controversial annual meetings where people are yelling about why they weren’t allowed on the ballots. We’ve eliminated the strenuous process of having nominations made from the floor that result in handwritten ballots and, finally, we’ve minimized confusion. We also created more transparency for shareholders who are not overly involved in the building. This handbook eliminates any of the gossip or rumors that occur throughout the year, and it informs the shareholders about the process.