Helping public companies and their suppliers deliver better and more cost-effective programs since 1994

“Virtual Inspection Of Elections” 

An Intriguing Moneysaving Option: But Is This A Good Option For Your Company? We Offer Some Important Considerations

In late February, your editor served as the Inspector of Election in what he believes to have been the fi ver “Virtual Inspection” – for a U.S. listed company that decided to have its 2012 annual meeting in Taiwan, where much of their manufacturing is based.

While the meeting took place on a Monday morning at 10:00 a.m. local time in Taiwan, it was 9:00 p.m. eastern time in the USA – on Super Bowl Sunday evening – and during the fourth quarter to boot – with your editor as the Inspector, and a representative of the company’s US counsel attending the meeting via an open telephone line.

The meeting – like the vast majority of shareholder meetings at small and mid-cap companies – took just over 15 minutes to conclude. No outside shareholders were in attendance and no proxies or ballots were presented at the meeting – other than the totals for those that had been processed on the previous Friday, when phone and internet voting shut down, as disclosed in the proxy statement.

Clearly one could not cost-justify a trip to Taiwan and back on the off-chance that the Inspector might have to “inspect” one or two last-minute proxies or ballots. But, of course, ballots were on hand and we were all prepared to deal with anything that might get presented at the physical meeting site – with a carefully written game-plan and a short addition to the script that would describe just how the company – and the Inspector – would deal with such items in order to “inspect” them, get all the valid votes into the count and render a Final Report on the Voting.

We have been thinking about the many cost-benefi of “Virtual Inspections of Election” for ten+ years now – since “virtual shareholder meetings” first became possible under the laws of technology-aware states. Here are a few considerations that we think are important:

  • As with shareholder meetings in general, the “virtual only”  Inspection  option  is  almost  certainly  NOT a good idea if you normally have a large turnout of potential proxy-bearers and voters in person – or think you might have a large number this year. The “optics” are bad, an embarrassing scramble to collect and deal with the votes may well arise and, after all, someone does need to physically “inspect” what is presented and get the valid votes into the final numbers.
  • Very important to note, we think, is that a seasoned Inspector is often the most experienced person in the room when it comes  to  running  a  smoothly- run shareholder meeting – and in anticipating and dealing with the unexpected events that often arise. So very often – even at very small companies – and especially if you are having your first shareholder meeting – or a “special meeting” to decide something very important – engaging such a person turns out to be one of the best investments in the meeting one could make…and the cheapest “meeting- insurance” imaginable.
  • We’ve said this before…but Inspectors MUST do something to Inspect. They’ve taken an oath to “carry out the duties of Inspector to the best of [their] ability and with strict impartiality.” So clearly, they had better know exactly what these duties ARE…and, ideally, have a written summary of what they are, and how they will carry them out…and what they will say if challenged…And then, of course, they must DO their duty.
  • But with all this said, if a company has a “virtual only” meeting – or if few-to-no shareholders typically attend your meetings – “virtual inspection” can make very compelling economic sense…and can free the smallish pool of truly “seasoned Inspectors” to go where they are most needed.
  • One last but very important tip: If “virtual voting” is to be permitted at the meeting, additional due diligence on the part of the Inspector is warranted in order to carry out “the duties of Inspector” and to properly vouch for the results.


The “virtual inspection” procedures and script we use were essentially derived from the “emergency script” we keep in our meeting kit – on the off-chance that the designated Inspector gets detained in transit…like in air- traffic delays, flash floods, ice storms, tornadoes, etc. – which seem to be increasingly prevalent these days. Add this to your Meeting kit-bag, we’d urge. (If you would like a copy of the template we use, just call or email the editor)