ABA Banking Journal - January/February 2016 - (Page 51)
> BOARD MATTERS
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
"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.
"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
"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
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."
Share insights on strategy. When
shareholders are present, "the
focus needs to be forwardlooking, 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."
...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."
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.
Anticipate hard questions.
Hot topics can include
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
Shake things up to
"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.
DEBRA COPE is a financial writer in
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Table of Contents for the Digital Edition of ABA Banking Journal - January/February 2016
Cover Story: Train To Your Advantage
Filling The Trust Gap
Banking In The Sweet Spot
Safe Banking, Savvy Seniors
ABA Compliance Center Inbox
From The States
Corporate Social Responsibility
Index of Advertisers
ABA Banking Journal - January/February 2016