Exclusive: Activist shareholders push for ‘hybrid’ AGMs over fears firms are stifling debate
A shareholder activist group is pushing FTSE 100 bosses to hold ‘hybrid’ shareholder meetings over fears that firms are stifling investor debate by holding meetings in person.
In a letter seen by City PM, activist group ShareAction wrote to firms urging them to hold their annual general meetings both in person and online so investors around the world can engage with bosses, rather than those just in the room.
“Well-run virtual AGM can be more inclusive, enabling attendance by those who might not be able to join an in-person event,” wrote Simon Rawson, director of corporate engagement at ShareAction.
“In our experience, critical elements include live, interactive, question and answer sessions with the full Board (including non-executive directors) and making use of video conferencing, so that participants can see each other.”
Rawson warned that the approach adopted by many firms since the outset of the pandemic had also shut out investors from engaging with board members.
Too many firms had pivoted to digital AGM models that provided no opportunity for dialogue between investors and the board, he said.
ShareAction told City PM it had received 20 replies so far and 15 of those had committed to hold hybrid meetings, while five will press ahead with in-person only.
The letter from ShareAction comes as the city gears up for AGM season when shareholders have the option to hold boards to account on issues of corporate governance and the direction of firms they invest in.
But Lumi, a firm which facilitates engagement at company AGMs, echoed fears that some formats were still shutting investors out of debate.
“The big challenge now will be making sure everyone who owns shares is able to access the AGM,” said Kerry Leighton-Bailey, director of shareholder engagement at Lumi.
“Some investment platforms are making it easier for shareholders to vote by proxy, but it can still be incredibly difficult to navigate this – with the vast majority of shareholders not realising that they can’t easily attend.”
Leighton-Bailey said there was still “significant work” needed to simplify the interaction between investors and boards, and until then vast numbers of shareholders will continue to be cut out of attending meetings.
Research from activist investing platform Tulipshare found that shareholder engagement had plunged, with only 22 per cent of investors saying they exercise their ‘shareholder right’ and vote on issues at the companies they have cash in.
Tulipshare has tabled proposals at both Amazon and Salesforce this year, pushing Amazon to ensure fair and safe working environments for its warehouse workers, and a proposal asking Salesforce to improve the company’s racial equality record.
The firm called on shareholders at the two firms to step up back its proposals this week.