Based on research by Dr. Miriam Schwartz-Ziv
Throughout the past year and a half plus of the COVID-19 pandemic much of the workforce has adapted different “work from home” policies. Although the pandemic is yet to be over, the mass availability of covid vaccines and booster shots have opened the possibilities for some return to “normalcy”. Many people are enjoying the benefits of working from home, such as less travel time or more scheduling flexibility, and are not jumping at the opportunity to return to their old routines.
One question regarding the long-term effects of the pandemic on the workforce remains: will workplaces return to pre-covid policies, or continue to function within a hybrid framework in the post-covid world?
A potential answer to this question comes from the recent research published by Dr. Miriam Schwartz-Ziv, from the Hebrew University Business School, entitled How Shifting from In-Person to Virtual Shareholder Meetings Affects Shareholders’ Voice.
The study hones in on the transition of companies from in-person to virtual shareholder meetings, and sets out to examine if company shareholders had more influence before or after switching to an online meeting format.
Although they found that virtual meetings allow for a greater number of shareholders to participate in comparison to frontal meetings, virtual meetings are shorter and accordingly less time is spent on answering shareholders' questions.
These shorter meanings yield a decrease in time spent on both business updates, by 40%, and answering shareholder questions, by 14%. Shareholder meetings are the primary junction where investors are able to interact with company management and make business decisions relating to continued investment in the company.
Although virtual shareholder meetings offer advantages, e.g., they are less costly and more accessible to a wide audience, the paper demonstrates that relative to in-person meetings, companies have greater power in designing the content and structure of virtual-only meetings, and they may use this power to limit shareholders’ voice, especially when it is convenient for companies to do so—when shareholders are not supportive of management.
These meetings are crucial for the shareholders, giving them the forum to raise concerns and ask questions regarding different company policies and practices. At in-person meetings shareholders typically line up in front of the microphone to ask a question, and the firm does not know in advance what question each shareholder will ask. By contrast, since questions are submitted electronically at virtual-only shareholder meetings, firms are able to strategically select how many and which questions to address or, alternatively, ignore.
With shareholder meetings, the data seems to prove the comforts of working from home are qualitatively outweighed by the benefits of working in person. The jury is out on whether the workforce will choose the comforts of working from home or the benefits of working in person as we continue to rebuild together, working towards our new reality of “normalcy”.