Spark shareholders give the thumbs down to virtual-only annual meetings
Spark New Zealand's intention to move to a virtual-only annual meeting next year raised the ire of shareholders attending this year's one in person in Auckland today.
Chairman Mark Verbiest said as the country's leading digital services company, Spark intends to take a leadership role in what it regards as "the inevitable transition to virtual shareholder meetings."
"The reality is in today's world is all procedural aspects of the traditional shareholder meetings can now be virtualised, at considerably less cost to companies and to attending shareholders in terms of travel, and at considerably more convenience to those shareholders who live elsewhere and cannot attend (which is the majority of our investor base)," he said.
But the proposal met strong opposition from many of the 130 or so shareholders who turned up at the annual meeting in Auckland, including the New Zealand Shareholders Association, which favours continuing the current hybrid model, where shareholders can participate online through their computers or mobile phones or physically attend. "Hybrids are the way of the future," association chairman John Hawkins said.
He said the move to a virtual meeting was discussed two years ago with the Spark board but the association thought it would be a retrograde step.
"That view hasn't changed," he said. "What it signals is a disenfranchisement of shareholders who don't have access to or are not comfortable with using modern technology."
Z Energy is the only other NZX-listed company considering holding virtual-only meetings, due to poor attendance, and Mr Verbiest said shareholder attendance at Spark's annual meetings has declined by 30% in the past five years. He's had similar feedback about declining attendance from directors in other companies.
Telecommunications network operator Chorus held its annual meeting at its Wellington offices this week, attracting three dozen people and fielding just two questions from the floor.
About 90 listed companies in the US have now moved to fully virtual meetings, Mr Verbiest said.
While access to board and management is always important, shareholders can already actively engage with Spark in different ways, he said. It provided a continuous flow of information through the stock exchange and media announcements, and held regular briefings with institutional investors and proactively engaged with the New Zealand Shareholders Association.
He assured shareholders their views would be taken into consideration before a final decision is made but after the meeting said moving to virtual meetings "was inevitable and sensible."
Mr Verbiest has also pledged that physical meetings will still be held if any controversial issues arise that need to be debated.
Mr Hawkins said the question is who decides what is controversial and many shareholders expressed their concern at losing the ability to bale up directors and management after the annual meeting on matters they wanted to raise or seek further explanation on.
Shareholder Martin Geary, who is a small shareholder in about 70 NZX companies, said older investors like himself would feel awkward using the web to question directors rather than through face-to-face communications.
"Is this like an 'Animal Farm' kind of thing where they can cut us off if they don't like what we're saying?" he said.
He also blamed poor shareholder attendance on the venue near Spark's head office, which has a lack of adjacent free parking.
At the traditional free spread provided by companies after annual meetings, Mr Hawkins said, tongue-in-cheek, he was surprised no shareholder had raised missing out on the food as an objection to virtual meetings.