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Shareholder meetings: What’s your version?

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The final two weeks of June are a busy time for companies whose fiscal year concludes at the end of March, as their annual shareholder meetings are normally held during this time. What happens at such meetings is closely watched, particularly at firms where management proposals are being debated, such as the acquisition of Shire PLC by Takeda Pharmaceutical Co. and the proposed merger of Idemitsu Kosan Co. with Showa Shell Sekiyu K.K.

The way shareholder meetings are conducted has evolved since corporate governance and stewardship codes were put in place. Greater transparency and the “comply or explain” principle is required. Companies have attempted to make their meetings more open and transparent. For example, the dates of shareholder meeting are distributed more now than when the meetings of many major corporations were held on the same day. Some companies hold their meeting on weekends so more shareholders can attend.

The number of actual attendees fluctuates depending on the degree of interest in each company’s business practices, the existence of controversial topics and the gifts given to attendees. Some companies say that the number of attendees fell 80 percent when they discontinued giving gifts in recent years. In addition, the introduction of online voting has enables shareholders to make their voices heard without attending meetings.

At the meetings, questions such as those related to the directors’ compensation scheme, the roles of advisers, and the number of independent outside board members, are asked not only to the chair of the meeting (often the CEO), but also to the outside board members to ensure independent views are heard. Overall, more discussion and debate take place at these meetings compared with decades ago when votes by shareholders were more ceremonial and there were few discussions.

In a........

© The Japan Times