Virtual Shareholder Meetings

Francois Brochet (), Roman Chychyla () and Fabrizio Ferri ()
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Francois Brochet: Accounting Department, Questrom School of Business, Boston University, Boston, Massachusetts 02215
Roman Chychyla: Accounting Department, Miami Herbert Business School, University of Miami, Coral Gables, Florida 33146
Fabrizio Ferri: Accounting Department, Miami Herbert Business School, University of Miami, Coral Gables, Florida 33146; European Corporate Governance Institute, 1000 Brussels, Belgium

Management Science, 2024, vol. 70, issue 9, 5896-5930

Abstract: We examine determinants and consequences of virtual shareholder meetings (VSMs) using a sample of voluntary (precoronavirus disease 2019) and forced (i.e., because of coronavirus disease 2019) VSM adopters. Voluntary adopters are tech firms and firms traditionally more engaged with shareholders, consistent with the stated objective to increase shareholder participation. In contrast, we do not find that firms choose the virtual format to avoid shareholders’ scrutiny. Textual analysis of transcripts suggests that in VSMs, business presentations by management are less frequent, shorter, and more generic but only among voluntary adopters, suggesting that these properties reflect a firm’s choice rather than are a by-product of the virtual format per se. VSMs are more likely to exhibit no questions during the question and answer period, but conditioned upon having one question, they exhibit the same number of questions; such questions are more negative in tone, inconsistent with managers using the virtual format to filter out hostile questions. Finally, there is some evidence of greater abnormal absolute returns around VSMs, supporting the notion that greater attendance translates into greater information content. Overall, VSMs exhibit less activity on average, consistent with critics’ concerns, but such reduced activity does not appear to cause a loss in information content nor does it appear to reflect an attempt to avoid scrutiny.

Keywords: virtual shareholder meeting; annual shareholder meeting; disclosure; corporate governance (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormnsc:v:70:y:2024:i:9:p:5896-5930

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