The annual general meeting (AGM) has been the subject of much
During the last 10 years, one-to-one meetings between institutional
shareholders and companies have become the norm. This relationship and
large portfolios have made regular attendance by fund managers at AGMs
difficult to achieve.
As a result the meeting has become predominantly a forum for private
Institutions participate by voting their shares in advance.
Most companies value their individual shareholders and the AGM provides
the only occasion when the company can engage in face-to-face dialogue
with this group. Companies should exploit this rather than see it as a
necessary evil and shareholders should use the event to call directors
In addition to the formal business, private shareholders have a right to
be given the same information as institutions. So companies should make
a first class presentation, reflecting the issues facing it within the
context of its market. Include current strategy and future policy as
well as comments on the previous year. Encourage shareholders to take
part in the proceedings. Avoid using proxy votes to carry resolutions
without adequate discussion. Even small details help. For example,
companies should ask directors standing for election to introduce
themselves and explain the contribution they hope to make. The Q&A
session can be structured by taking questions received before the
meeting or using cards. Invite shareholders to put their questions and
board members to join the chairman in replying.
The meeting should be effective within an overall communications
programme, the ’owners’ feeling involved rather than ignored and
frustrated. Shareholders who find the AGM stimulating will pass on the
good news; they are also more likely to attend future meetings.
Moreover, media and City representatives will reflect this
Companies should encourage directors to be available after the meeting
to answer questions. Registrars and auditors should be on hand to
assists shareholders. An exit poll could be held to identify what
attendees were hoping for and to what extent their expectations have
Pre-planning lies at the heart of a successful AGM. Invite questions and
comments in advance to gauge opinion and allow preparation of a
By adopting a positive, proactive approach, companies generate support
for their position in response to special interest groups.
If the AGM is recorded on video, copies can be made available and
included on the company’s web site. Or send shareholders a summary of
Documentation is the best way to involve all shareholders in the AGM,
not only those who attend.
Problems of attendance may find solution in the rapid development of
technology. By using the internet, digital television and video footage,
the AGM could go to investors as well as shareholders coming to the AGM
- more satisfactory, convenient and less costly.
These ideas will not suit all companies, but some can be implemented
with little additional expense. The result will be improved
relationships, better informed investors and more supportive
shareholders - a prize worth working towards. Communications between
companies and shareholders is the essence of good corporate governance.
The AGM can demonstrate a commitment to this process.