An investment charity has called Annual General Meetings (AGMs) to make them more accessible. He suggests that in-person meetings, unlike virtual meetings, have the potential to stifle debate.
So let’s take a closer look at whether it’s time for general meetings to undergo a reform.
What is an annual general meeting (AGM)?
An AGM is an annual meeting of shareholders interested in a particular company. Typically, these meetings provide investors with an opportunity to vote on important decisions.
Major shareholders do not have a monopoly on these meetings. This is because AGMs generally give all shareholders, whether large or small, the opportunity to participate in decision-making.
What has been said about the way AGMs are run?
According to ShareAction, organizations should be encouraged to hold hybrid shareholder meetings to expand the number of participating investors. A ‘hybrid’ approach refers to having these types of meetings both in person and via video conference.
The reason the charity is advocating hybrid meetings is that it suggests remote meetings can give investors more opportunities to vote on issues that align with their values. For example, these could include topics related to environmental or social issues.
Kerry Leighton-Bailey, AGM Vendor Director LumiGlobal, explains this in more detail. She says: “Shareholders increasingly want their voices to be heard on key issues like ESG or diversity, and making sure AGMs are as inclusive as possible is a crucial part of this.”
Leighton-Bailey goes on to highlight how a number of barriers can contribute to low turnout at the General Shareholders’ Meeting. She explains: “Many shareholders might have been excluded from AGMs in the past because of the location of the meeting, the time of day they are held or even accessibility issues.
“Once the barriers to how people arrive are removed, we are seeing AGMs opening up to a different demographic that is eager to participate. When meetings are virtual or hybrid, we have seen twice as many shareholders attend and ask questions compared to face-to-face only events.”
Is it time to reform the way general meetings are conducted?
Enabling virtual AGMs has been shown to expand the number of attendees at these meetings. Therefore, if organizations are genuinely interested in hearing the views of a broader group of shareholders, it can easily be argued that offering virtual access to general meetings should become the norm.
In fact, virtual meetings can be just as effective as traditional face-to-face meetings. We know this from the way virtual meetings became common during the first waves of the Covid-19 pandemic.
A broader question is, of course, whether companies really value having more attendees at their annual meetings. For example, if virtual general assemblies become more accessible, this may increase the number of young voters. This is because it could be argued that this group is more likely to attend an AGM if it is held online.
Recent research has revealed that young investors are more likely to vote at general shareholders’ meetings than older investors. As a result, if virtual meetings become more common, young investors could soon have a much bigger voice.
According to Kerry Leighton-Bailey, if online meetings become more common, virtual attendees should have the same rights as in-person attendees. She explains: “Companies will only continue to hold virtual general meetings if the experience is great for both shareholders and the board. That means making sure the platform is as inclusive as possible and provides the same rights as in person; for example, ensuring that shareholders can ask questions during the meeting but also vote live on the resolutions discussed.”
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