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OPINIONScrap the annual meetingBy Fraser SeitelFraser P. Seitel hasbeen a communicationsconsultant, author andteacher for 30 years. Heis the author of thePrentice-Hall text, ThePractice of PublicRelations.It is time once again for that annualritual where 14,000 public companyCEOs making tens of millions of dollarsare dragged kicking and screamingto drone on about the “past year’sprogress” and face a host of irreverentand irrelevant questions from tens ofshareholders gathered in convocation atthe Securities and ExchangeCommission-required “corporate annualmeeting.”I say “tens of shareholders,”becausethat, alas, is whattoday’s annual meetingstypically draw— a grab bag ofattendees, generallycomposed of lessth a n - i n t e r e s t e demployees who workin the building andare more or less obligatedto attend, oldpeople with little elseto do, and a dwindlingposse of aging“corporate gadflies,” whose intentionsin altering corporate governance areabout as pure as Donald Trump’s inchallenging the President’s birth certificate.Occasionally, one might alsoencounter a disgruntled ex-employeewishing to mix it up with the folks whohave done him wrong. But even theserecalcitrants are becoming harder tofind.The people who really matter — institutionaland individual shareholders —rarely attend the annual boondoggle.So here’s the point. Where once theannual meeting may have been justifiedin exposing secretive companies to atleast one day of open disclosure, intoday’s environment of the Internet andround-the-clock business journalism,the annual meeting — at least as it iscurrently composed — no longer makessense.It has become a colossal waste of corporateshareholder money and corporateexecutive time that reveals little andproves nothing. Clearly, the traditionalannual meeting should be replaced witha more efficient 21st century substitutethat fulfills SEC requirements and doesn’twaste everybody’s time and money.Here’s why annual meetings nolonger make sense:• Canned speech.Annual meetings invariably beginwith the CEO — and, if you’re reallyunlucky, the CFO — rehashing the“Letter from the Chairman” from thejust-distributed annual report. Rarely isfresh material included in these reports,because, frankly, most shareholdersdon’t read the letter. And even morefrankly, the annual meeting speech,delivered as it is before precious few ofthe shareholders, just ain’t worth it.So the result is recycled material,generally delivered in an uninspiredmanner by corporate officers goingthrough the motions.• Cooked votes.After the speeches, it’s time for theshareholders to vote for directors standingfor reelection, the outside auditors,and several shareholder resolutions.These are important pieces of business,but they’ve already been decided,through proxy, by the time the meetingcommences.Most of these proxy votes are cast byinstitutions, which control the vastmajority of votes. And rarely, if ever, ismanagement’s will challenged. So thevote is “cooked,” and the meeting votingis a charade.• Worthless questioning.The idea that shareholders get anopportunity to grill management is certainlya noble one in theory. It justdoesn’t work in practice.Annual meeting question periods aregenerally dominated by a small groupof wingnuts, who thrive on their annualmoment in the limelight by terrorizingchairmen with inane accusations andincessant babble. In the old days, gadflieslike the Gilbert brothers, Lewisand John, would put managementthrough its paces with pointed questions,based on their own knowledge ofaccounting.Today, the Gilberts have passed on,and 21st century gadflies are led by theimpenetrable Evelyn Y. Davis, the agingand certifiable loony toon, who hasmade corporate CEO’s lives miserablefor 40 years. (A friend of mine once hadto stop his chairman from taking aswing at the diminutive Davis, so thoroughlyhad she annoyed him).The point is that encouraging publicityseekers like Davis to spread theirwings once a year would seem to be theProfessional Developmentlast thing shareholders should be puttingon their tab.So what to do to rescue the annual ritualand bring it into the Internet age.Former Lockheed Martin ChairmanNorm Augustine has suggested thatshareholders should submit seriousquestions about the company; the outsideauditors should review them andselect a number to convey to management;and then management shouldrespond to shareholders with itsanswers on the Net.Another alternative, attempted byseveral companies, is a “virtual meeting,”at which holders submit questionsto management over the Net. Whilesome object that this negates the “spontaneity”of the in-person meetings, sucha format for most companies, if only forthe cost savings alone, makes greatgood sense.Of course, some in-person annualmeetings serve a purpose — Exxon’s ofa few years ago, when Rockefellerdescendants spoke in favor of separatingthe chairman and CEO. But theseworthwhile meetings are clearly theminority.In most cases, the annual meeting isas outmoded as the buggy whip. Thewhole concept ought to be scrapped forsomething that reflects the new mediaand a new day. News BriefsU.S. BUDGET NEEDS‘SHOCK TO THE SYSTEM’Politicians must reflect courage, ingenuity andresolve to bring back more than 17 million U.S. jobslost over the last decade, PR counselor RobertDilenschneider told PRSA’s Westchester/FairfieldCounty Chapter May 19.Dilenschneider, the former Chief of Hill &Knowlton, said he sees the potential for a “renaissance”in the U.S. and the recreation of a middleclass with a new emphasis on quality and craftsmanshipif urgently needed tax dollars will fundprojects through the country.“Business needs tax incentives, support fromWall Street, which will surely criticize them, and thebest possible advice they can get to plan competitivelyfor their own operations to make this happen,”he said at the Hyatt Regency Hotel event.Dilenschneider said the country first has to getits “budget in order,” which will take a “substantialrevisiting” of entitlement programs like Medicareand Social Security.“There has to be some shock to the system,” hesaid, noting the debt ceiling “will require seriousdebate” in Congress. “We should all applaud publicofficials with the courage to present us with somepretty unappetizing choices.”Dilenschneider sees hope that 64% ofAmericans are saving more and spending less and61% say they’ve re-thought their priorities in life.32JUNE 2011 WWW.ODWYERPR.COM
Congress should petition US propaganda effortsBy Wes PedersenThe U.S. is wasting millions of dollarson propaganda to sway mindsin the Middle East.The latest stab at Pentagon PR is anoutrage, and should help trigger aCongressional probe into the cost-effectivenessand basic worth of America’spropaganda effort.This particular Defense Dept. contractis for help in theU.S. AfghanCommand. It callsfor PR to help theWes Pedersen is aretired Foreign ServiceOfficer and principal atWes PedersenCommunications andPublic RelationsWashington, D.C.Command “takeaggressive actions towin the battle forpublic (Afghan) perception.”That’s boilerplatecopy from almost 10years ago. Here’swhat’s new: the contractis written so itcould continue until2016.That is twoyears after our troops are supposed toleave.The Command is not retrenching PRwise.It wants to expand its 24/7 efforts tomonitor native-language radio, TV andprint to include Internet and, apparently,cellphone transmissions. (Big Brotherpotential with the latter?)Meanwhile, the U.S. Embassy and theU.S. Agency for InternationalDevelopment (AID) are spending millionsfor their Afghanistan MediaDevelopment and Empowerment project.One PR shop that has profited from U.S.largesse is The Moby Group, founded onan AID grant and now an Afghan communicationsconglomerate. Its TV programsinclude Afghan versions of U.S.reality shows and “American Idol.”Has any of this effort actually helpedthe U.S.? Probably not, especially consideringthat, for all practical purposes,we lost Afghanistan years ago.The same is true of Iraq. Considerexcerpts from a new report, “Iraq’s NewsMedia After Saddam,” released by theCenter for International MediaAssistance of the National Endowmentfor Democracy:“Despite massive infusion of cash fromthe U.S. government for media development– more than $500 million by mostestimates — the country’s media developmentdoes not look promising on severalfronts …“(Many of the Iraq media) havebecome mouthpieces for ethno-politicalfactions with the potential to inflamesectarian divisions that have led thecountry to the brink of civil war.”As things now stand, the WhiteHouse and NATO have made the job ofany official U.S. publicist almostimpossible throughout the Middle Eastand much of the rest of the world.The White House is ensnarled inefforts to explain away discrepancies inits early story of its execution of binLaden. Failing in that task, it has gonesilent until some sensible story can bepatched together.Doubts are growing louder and widernow in the Middle East that we willever give them a script they canbelieve.U.S. public affairs offices throughoutthe region are sweating; trying toassure local media friends we really arenot the clumsy PR oafs everyone thereassumes us to be.As for Libya, NATO, and PresidentObama early on, have denied that ourGuest Columnstrikes on Gaddafi’s compound wereaimed at killing Gaddafi.We have lied big time on Libya. TheWhite House has lied. NATO has lied.The deadly onslaughts against theGaddafi compound were all clearlyaimed at Gaddafi himself. One killed aGaddafi son and three of the leader’sgrandchildren.Our insistence that we are not tryingblast the head of a still sovereign countryinto hell are recognized as phony byanyone who can add one and one.With all that as pathetic background,it is clear that our propaganda warrantre-examination. We have too many officialfeet in the PR fire in the MiddleEast, obviously. Congress ought to takea prompt look at our PR programsthere, and probably around the world.In the process, anyone making such astudy should ask this question: Do wereally need a huge propaganda establishmentworking the overseas crowdanymore? We certainly no longer needheavy communications equipment.Social media, in all their guises, canswamp the world with official messagesin seconds. JUNE 2011 WWW.ODWYERPR.COM 33
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