The Virtual Shareholders Meeting: How to make it work?

A Virtual General Meeting (“VGM”) of Shareholders allows shareholders to communicate quickly, efficiently and cost-effectively with each other and the Board. Shareholders receive a code that enables them to log on to a heavily secured VGM platform where they can observe the agenda, reports, proposals and other discussion papers. Furthermore, a VGM- platform can retain a bulletin board, which allows shareholders to set up a constructive dialogue with each other and the Board and hereby increase their information supply. Although most jurisdictions require a physical shareholders’ meeting, since 2000 Delaware (USA) allows corporations to hold their meeting solely online. Even though several corporations have held their shareholders meetings solely online, they have not been a resounding success. The author attributes the limited success to three factors: (1) The rights of shareholders are not sufficiently safeguarded, (2) negative publicity and (3) cold feet. The introduction of a new corporate figure, the Shareholders Rights Manager, could help to solve these problems so that the VGM will become the future of the corporate decision-making process.