RUTE SUNDERLAND: Glad to learn to love AGM, they don’t just have posters and sandwiches with curly crusts – they are a pillar of shareholder democracy

  • AGM is a unique device in the corporate calendar
  • The annual meeting is often a mixture of a student demonstration and a village holiday
  • Young protesters mingle with older private shareholders, and everyone can have their say

AGM is back with full force. During the pandemic, most annual general meetings were held in digital form, no doubt to the secret satisfaction of many chairmen.

It is much easier to monitor the process at a virtual meeting than to deal personally with shareholders and their awkward issues.

Even before Covid some companies didn’t seem to want to face a real live investor.

Mark on the spot: the great thing is that any investor – or a member, in the case of a mutual company – has an equal right to be heard

Gaming giant Entain loved to hold his meeting in Gibraltar, which made it much less accessible to the UK’s small shareholders; shameful position for the FTSE 100 company.

AGM is a unique event in the corporate calendar, and the current season was full of fireworks.

Announcements of results are usually dry cases. But the annual meeting is often a mixture of a student demonstration and a village holiday. Awakened young protesters mingle with elderly private shareholders, and everyone can have their say.

At Barclays, activists banned the chairman, and some stuck their pockets to the seats to make them harder to throw away. Ocado and GSK had wage disputes, and Just Eat had a drama announcing the resignation of its chairman and an investigation into the head just before the meeting.

Large shareholders try to cooperate with councils behind the scenes, so a large institutional investor is quite rare.

If that happens – as in 2018, when the then-head of Aberdeen Standard addressed the audience at a Persimmon meeting over the exaggerated salary of former boss Jeff Fairburn – it could have a strong effect. The best thing about the general meeting is that any investor – or a member, in the case of a mutual company – has an equal right to be heard.

Ordinary depositors, such as John Higgins, a longtime member of LV’s mutual insurer, can challenge the board.

Mr Higgins has already received strong support ahead of this year’s LV meeting for a vote of no confidence in the CEO for his chaotic attempt to transfer the insurer to private equity.

Of course, there is no excuse for violent or rude behavior by shareholders.

However, protests at a meeting of investors are usually a sign that the company has not listened. The confrontation with the directors at the general meeting is a theater of last resort.

It would pay advice to listen better. Investors – looking ahead in their assessment of risks to the global economy – often raise concerns that have not yet penetrated the minds.

Protests against environmental pollution, climate change and, returning, apartheid, are now part of the mainstream, but were early voiced in the form of boycotts and actions to influence corporations. Many American firms see the positive power of AGMs to build their brand and use meetings as spectacular marketing activities.

One of the most memorable I attended was Starbucks in Seattle in 2016. The shareholders were treated to a rock concert – Alicia Keys – and a political rally at which founder Howard Schultz spoke out against Trump’s policies.

There is no British equivalent of Warren Buffett’s Berkshire Hathaway AGM in Nebraska – a weekend festival for investors like Glastonbury with spreadsheets.

Here the councils seem to view the general meeting as, at best, a nuisance where, even if there are no protests, they have to talk to retirees over the buffet. In fact, AGM is an opportunity for councils to gain valuable information. The M&S meetings are known for small investors who criticize lingerie and fashion.

Private shareholders can ask insightful questions that embarrass city analysts.

Glad to learn to love AGM. They don’t just have posters and sandwiches with curly crusts. They are the foundation of shareholder democracy.


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