EDITORIAL PAGE — Hello, I must be going

The crop of 1994 annual meetings is now essentially behind us.

The annual meeting is one of the few opportunities for the minority shareholder to obtain first-hand information about a company’s activities and plans, as well as meet and quiz management in person.

Whether a company succeeds or fails depends on how its securities fare in the future. And the best way to examine the clues to the future is to examine the past. By learning the past earnings record and current financial health of a company, an investor can decide whether or not a stock is worth his while. Which is why the annual meeting is a must event for any current or potential shareholder.

Following the completion of the legal portion of the meeting, including the appointment of directors and auditors, most companies give shareholders a summary of the year’s activity and a review of future plans.

Not only does this allow management to keep shareholders abreast of activities; it serves as an opportunity to pitch the company story to others who may be in the audience, including analysts, prospective shareholders and the press.

Why is it, then, that there are always some meetings wherein management seems more intent on setting a new record time for concluding the proceedings than on answering to minority shareholders?

The record-breaking meeting typically involves the president whipping through the required legal matters as quickly as possible before adjourning the proceedings with a gleeful announcement that last year’s time was beaten.

This is excusable in cases where the company is not particularly active and is holding the meeting at its own or its lawyer’s office.

What should not be excused is the company that rents a view meeting room with an open bar and a spread of food in a ritzy downtown hotel, only to proceed in “record time.”

Shareholders deserve better.

Who owns what?

Full disclosure by companies is one of the most crucial factors influencing the decision of investors to buy, hold or sell shares.

Dissemination of information begins with a news release and spreads from there through various sources, including, of course, The Northern Miner.

Many companies, to their credit, strive to tell “the whole story,” while a great many others fall short on even the most basic information. By basics, we refer to such obvious items as a breakdown of the ownership of the property referred to in a given news release. Such references as “the company’s XYZ property” can be misleading. The reader automatically assumes that “the company’s” refers to a 100% interest ownership, but that is not always the case. “The company’s” can mean anything from having a 100% interest or less, to having any number of unmentioned joint-venture partners.

Granted, a small amount of research can usually uncover the ownership structure of a property; nevertheless, the company itself should disclose this information in full for the benefit of the shareholder and the prospective shareholder.