Is it time for AGMs to become more accessible?
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An investing charity has called for annual general meetings (AGMs) to become more accessible. It suggests that in-person meetings, as opposed to virtual meetings, have the potential to stifle debate.
So, let’s take a closer look at whether it’s time for AGMs to undergo reform.
What is an annual general meeting (AGM)?
An AGM is a yearly meeting of interested shareholders in a particular company. Usually, these meetings give investors opportunities to vote on important decisions.
Major shareholders don’t have a monopoly in these meetings. That’s because AGMs typically provide all shareholders, whether large or small, with an opportunity to participate in decision-making.
What’s been said about the way AGMs are held?
According to ShareAction, organisations should be encouraged to hold hybrid shareholder meetings in order to widen the number of investors participating. A ‘hybrid’ approach refers to having these types of meetings both in-person and via video conference.
The reason why the charity is an advocate of hybrid meetings is that it suggests remote meetings can provide investors with more opportunities to vote on matters that align with their values. For example, these could include issues relating to environmental or social matters.
Kerry Leighton-Bailey, director at AGM provider Lumi Global, explains this in more detail. She says: “Shareholders increasingly want their voices heard on key issues such as 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 contributing to low AGM turnouts. She explains: “Many shareholders might have been excluded from AGMs in the past by the meeting location, the time of day they’re held or even accessibility issues.
“Once you take away the barriers of how people get there, we’re seeing AGMs open up to a different demographic that is keen to participate. When meetings are virtual or hybrid, we’ve seen twice as many shareholders attend and ask questions compared to solely in-person events.”
Is it time to reform the way AGMs are held?
Allowing virtual AGMs has been shown to widen the number of attendees at these meetings. So, if organisations are genuinely interested in hearing the opinions of a wider pool of shareholders, it can be easily argued that offering virtual access to AGMs should become the norm.
In fact, virtual meetings can be just as effective as traditional in-person meetings. We know this because of the way virtual meetings became commonplace during the initial waves of the Covid-19 pandemic.
A wider question is, of course, whether companies truly value having more attendees at their annual meetings. For example, should virtual AGMs become more accessible, then it’s possible this will increase the number of young voters. That’s because it could be argued this group would be more likely to attend an AGM if held online.
Recent research has revealed that young investors are more likely to vote at AGMs than older investors. As a result, if virtual meetings do become more common, young investors could soon have a much bigger say.
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 run virtual AGMs 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 shareholders can ask questions during the meeting but also can vote live on the resolutions discussed.”
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