8 Tips for Running a More Efficient Annual Shareholder Meeting

By Debra Cope

In an industry as diverse as banking, there is no perfect approach to conducting an annual meeting of shareholders. But there is consensus that early and consistent preparation is essential.

“The first board of directors meeting of the year is time to make sure the board has a good idea of what is coming their way,” says Jonathan Hightower, an Atlanta-based partner in the law firm Bryan Cave. The board must make sure the governance and nominating processes are on track before spring and summer, when most annual meetings are held, he adds.

Annual meeting rules vary by ownership structure. If a banking company’s shares are traded on an exchange, the Securities and Exchange Commission’s requirements apply, covering issues such as disclosure and forward statements. Banks are exempt from SEC rules if shares are not listed, giving them more latitude.

“It all depends on your shareholder base,” says Howard Jaffe, president and COO of Inland Bank and Trust Co., a $1.1 billion-asset bank in Oak Park, Ill. The requirements are simpler for private institutions like his, which has 270 shareholders, five of whom hold 90 percent of shares.

How can banks prepare? The following eight tips offer food for thought.

  1. Predict attendance. “You don’t want an auditorium that will seat 500 if you’re going to get 30, and you don’t want a training room than will seat 50 if you’ll have 200,” says Lynn Casteel, principal with investor relations firm Casteel Schoenborn, and a former bank investor relations chief. Including a response card in the meeting notice is an easy way to gauge attendance.
  2. Define responsibilities. “For every one of our public company clients, we prepare a proxy season calendar and a responsibility list,” Hightower says. “There are so many boxes to check, particularly for public companies, that it’s easy for something to fall through the cracks otherwise.”
  3. Prepare a script. “One of the biggest mistakes people make is trying to wing it when conducting the business portion of the meeting,” Hightower says. Keep the business session fairly short—20 minutes is not unusual—and have a script for the chairman. The goal? “Get through the business portion of the meeting efficiently without tripping over a governance or shareholder relationship issue.”
  4. Share insights on strategy. When shareholders are present, “the focus needs to be forward-looking, emphasizing strategy and opportunities and value creation,” Casteel says. Have a PowerPoint ready, but don’t focus on the past, he advises: “Fifteen minutes on last year’s performance is stale information. Help investors understand where the value creation is coming from.”
  5. …But keep it real, and don’t overpromise. “Be careful about what you say about future plans and strategies, because your credibility and reputation are on the line,” Jaffe says. Having said that, he adds: “Always do a presentation of results and strategies, even if you’re private,” so that “everyone understands the direction of the company.”
  6. Know your shareholders. Individual and institutional shareholders have different priorities. “If you have a local shareholder base, really communicate on how the investment is working for them,” Hightower says.
  7. Anticipate hard questions. Hot topics can include compensation, dividend policy, ongoing litigation, regulatory issues, succession planning, stock buybacks and public accounting firm changes, Casteel observes. “You don’t want to formulate responses in real time at the meeting, so develop possible responses beforehand,” he advises.
  8. Shake things up to increase attendance. “The most interesting thing we see is different approaches, whether it’s scheduling at 7 a.m. to have coffee, or having an annual celebration in the community,” Hightower says.



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