Why you should—and shouldn’t—host a virtual investors meeting

Last month, the Securities and Exchange Commission (SEC) made a move that could forever change the face of annual investor meetings: it gave the green light to virtual stakeholder meetings. As reported by the Wall Street Journal, Hewlett-Packard (HP) received an investor proposal which called for a vote to return to in-person investor meetings, but SEC said HP was allowed to drop the proposal without fanfare.

It’s a move that could very well open a Pandora’s box in the world of investor relations. Companies have been favoring virtual meetings, which can be done over the phone or via video conferencing, over the traditional in-person investor conference, as it saves them time, money and drastically minimizes meeting logistics.  But it’s a double-edged sword in this industry. Here are the pros and cons of hosting a virtual meeting.

Pro: The budget is drastically smaller

You don’t have to worry about booking a hotel block, hiring a caterer, hosting any special events or doling out any swag when investors dial in.

Con: There’s less interaction

Without those in-person meetings, a lot of collaboration is lost. Stakeholders aren’t able to ask as many questions or participate in the conversation as fully since virtual meetings tend to be a bit more structured.

Pro: It’s not a logistical nightmare

The same things that made the budget explode are the same things that are the nightmares of meeting planners everywhere. Instead of having to check on a million things to go right—did everyone get their special food requests? Is everyone’s room ready to enter upon check-in? Is the A/V system up to date?—planners just need to focus on making sure the calling system is up and running, which they only need to hire Broadridge Financial Solutions to do so.

Con: There’s less spontaneity

While there are plenty of things that could go wrong at live conference, it also lends itself to spontaneity and creative thinking. Spending multiple days with other investors and with the company executives allows people to interact with others they may not otherwise have approached. This can create new partnerships, new ideas and help build investors’ trust and faith in the company.

Pro: There’s more control

By doing a virtual meeting, you can schedule the meeting program almost down to the minute mark, which will not only save executives, shareholders and planners time but also help the company stay on message.

Con: It’s less transparent

With that control the company receives, investors lose their ability to ask tough questions and continue to press their point. A lack of transparency may be good in the short term for a company, especially if they are hoping to hide less than ideal quarterly returns or cut corners, but investors can’t trust in a company blindly. Plus, the truth always has a way of coming out sooner or later.