In the coronavirus era, firms face their shareholders online

Around one-third of Japan’s listed corporations held their shareholder meetings on June 26th. In a typical year it means thousands of people packed into halls, listening to speeches and exercising their voting rights. This year, because of the coronavirus outbreak, the scenes have been very different.

Telecom giant NTT had more than 7,000 shareholders participating in last year’s meeting. This year, the number was just 97. And while last year’s meeting took 90 minutes, this year’s was wrapped up in just half an hour.

SoftBank Group Corporation had only 23 people in the room for its meeting. All company executives, including CEO Son Masayoshi, took part remotely.

Suzuki Yutaka of the Daiwa Institute of Research says the companies had no choice but to change the format. However, he says it’s important that companies don’t try to exploit the situation to impose unnecessary restrictions.

“Some investors have leveled the criticism that limiting the number of participants weakens the dialogue between corporations and their shareholders,” says Suzuki. “The firms might fall short of one of the main aims of the meetings, which is to enhance understanding of the business.”

Many corporations limited the number of participants in their shareholder meeting.

Many companies staged hybrid meetings with some participants in the room, but most joining via online livestreams. It solved the safety issue, but raised security concerns. To avoid hacking and identity fraud, some firms asked participants to submit their questions and exercise their voting rights beforehand.

IT firm Asteria used its own blockchain technology to keep its meeting secure. Blockchain allows the company to confirm the identity of participants and makes it difficult to alter digital data. Shareholders joined the discussions and cast their votes from their smartphones.

Asteria’s executives believe this may be the model for corporate discussions and decision-making in the future as firms adjust to the coronavirus.

Suzuki says these online meetings could ultimately change relations between companies and their shareholders for the better. It may make it easier for firms to get the opinions of investors, putting decision-making at their fingertips.

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