While certainly not the first company to use some version of an electronic shareholder forum, Intel is apparently the first company to use Broadridge to help Intel host a virtual shareholder meeting and an electronic shareholder forum. Maybe third-party hosting of these e-forums is the next step in what has been a predicted trend for several years now.
Last year, the SEC issued new rules to encourage electronic forums, namely by providing a framework to ensure that (1) communications within the forums will not be considered proxy solicitations and (2) participants will be not liable for the fraudulent statements of other participants.
In an ideal world, such forums could allow management to gain insight into shareholder opinion in a less formal, and perhaps more responsive, way than voting a proxy card. For example, one of the big criticisms of “say on pay” proposals is that there is no way to know what a “no” vote on a compensation package actually means. High participation in an electronic shareholder forum could provide the opportunity to expand on what such a vote means.
However, there are some hurdles: (1) shareholders don’t have one collective will that can be discerned from electronic comments; (2) shareholders are unlikely to participate in large numbers; (3) e-forums could just be way to gain access to more important closed-door meeting with management; and (4) the loudest participants will be looking for ways to takeover the forum.
