COMPANY NEWS How to Take Your Message to the Shareholders

It's uncommon for executives from a public company to seek out and meet shareholders in the areas where they live t...


It's uncommon for executives from a public company to seek out and meet shareholders in the areas where they live to update them on the company's activities and answer their questions. But that's exactly what Vancouver-based Silver Standard Resources did with the company's president running a seven-city meeting marathon last year.

Many shareholders thought Silver Standard was holding its annual general meeting in their city. But it was just invited shareholders and the company president.

New York, Chicago, Miami, Dallas, Denver, San Diego and Los Angeles. These are the cities Silver Standard Resources focused on after they researched areas with the largest concentrations of their shareholders.

The research project was prompted by shareholders approaching company executives with questions at investment shows. "Shareholders would suggest that we do something in their city," says Silver Standard president Bob Quartermain. So one of North America's oldest publicly traded silver resource companies set out to meet the shareholders face to face in their own communities at a time when companies were looking for ways to regain shareholder confidence.

Thirty people showed up for Quartermain's first face-to-face with his company's shareholders in a Dallas hotel meeting room. That group represented approximately 10% of those who received invitations. A doctor and his wife drove two hours to attend.

Typically, shareholders meetings involve refreshments before Quartermain delivers a PowerPoint presentation with a question and answer period. Quartermain was impressed with the sophistication and level of knowledge displayed by shareholders. Some would offer advice. Others wanted to debate the merits of company decisions or future initiatives. Often, valuable information surfaced.

The meetings with shareholders were cost-effective because they were scheduled to dovetail with business trips that Quartermain had planned, either directly to the city where the meeting would be held or passing through that city.

Bob Quartermain also worked lean. He usually traveled alone and would set up the meeting room himself. Despite being turned out in a custom-tailored business suit for his shareholder odyssey, he was sometimes mistaken for the equipment man by those who arrived early.

A minister who is deaf attended a meeting with his wife and teenaged children. The wife was there to interpret Quartermain's presentation through sign language. The children came to learn more about their parents' investments and the operations of public companies. In Los Angeles, an investor told Quartermain he had held shares in eight companies including Silver Standard for nearly 50 years and this was the first real contact he had with any of them.

Quartermain is disarmingly candid and his presentation is unrehearsed. He tells people his salary details, gives out his telephone number and e-mail address. At several meetings, he told people to make sure they consumed all the refreshments or took them home because, as shareholders, they had paid for them. He also told shareholders all company assets are independently reviewed and audited by an engineering firm and "not another Arthur Anderson".

The meetings cost Silver Standard an average of US$650 each. The meeting room rental and food represented half the cost. The rest was additional travel and related expenses. Quartermain and his executive group feel the benefits far outweighed the cost.

The face-to-face meetings created a lot of goodwill. "Many shareholders went away feeling more comfortable with their investment," Quartermain says. "It's just as important to get shareholders to hold onto their stock as getting people to buy stock."

Not everything Quartermain heard from shareholders was positive. Some shareholders were unhappy they had purchased their stock at a higher price than the current market. Others expressed frustration that the price of silver had bottomed out at near Depression-era prices. But shareholders like to hear that Silver Standard is sitting on US$11 million in cash reserves, that silver prices are on the rise and that many of the company's assets may soon become economically viable as producing mines.

Quartermain plans to do another round of meetings this year. He will fine-tune the face-to-face shareholder meetings using what he has learned, to have an even greater positive impact on those who hold his company's stock. There are plans to list the places and dates of these upcoming meetings in the company's annual report.

Quartermain shares some of the positive lessons he has learned in these

* Ask your shareholders where they think the meeting should be held. They know the hotels in their city and their suggestions can often save time and embarrassment.

* Keep the locations simple. Choose name hotels with high visibility and make sure the directions you give are clear and up-to-date to ensure shareholders arrive on time. Most hotels charge for parking; make clear on the invitation that the company will absorb the cost of parking.

* Dress in business attire. Shareholders often show up wearing a shirt and tie and the CEO should be dressed accordingly.

* Expect an equal number of men and women.

* Make sure the refreshments include solid foods like cookies or finger sandwiches because light snacks provide an opportunity for shareholders to meet each other.

* Listen carefully to what shareholders will tell you and learn from this. Many have done in-depth research and are extremely knowledgeable about the areas in which your company operates.

* Invite shareholders to contact you directly at any time. This instills shareholder confidence and can sometimes yield valuable research and insight. This is seldom abused.

* Be aware of regulatory issues in each jurisdiction and don't say things that might come back to haunt you. Many shareholders take notes or tape these sessions. They will be back to next year's meeting to hold the CEO's feet to the fire if promises aren't kept.

Overall, the experience of Silver Standard with Quartermain going out to meet between 400 and 500 company shareholders in person was extremely positive. "I feel empowered by this," Quartermain says. "I believe these meetings fostered a lot of long-term goodwill and that's good for business."

Bob Quartermain can be reached at or 604-689-3846 ext. 201.

** This article was brought to our attention by Barry Forward, executive VP of Reputations Corp. in Vancouver. See


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