AGMs behind closed doors or virtual-only: it’s time to say enough!

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Appeal AGMs

Shareholders for Change released an appeal to say no to AGMs behind closed doors or virtual-only advocating for a hybrid approach that allows both in-person and virtual participation by shareholders.

The Annual General Meeting (AGM) is an important forum for corporate boards and management to convey the company’s financial position, performance, strategy, and long-term prospects to shareholders. It serves as a key mechanism for accountability and an opportunity for constructive dialogue in a formal setting. All parties have an interest in ensuring that AGMs are efficiently, democratically and securely facilitated. 

During the Covid pandemic, emergency legislation enabled virtual-only AGMs. We recognised the necessity of such an approach and we continue to acknowledge the continued relevance in the event of further ‘emergency’ situations. 

Yet we are no longer in an ‘emergency’ situation. We strongly believe that it is no longer necessary to restrict AGMs to a virtual-only format. Regulators and companies must recognise that this choice weakens shareholders’ rights, for instance, limiting shareholders’ direct interaction with boards and management and the ability to view materials presented at the meeting, ask unmoderated questions and make statements from the floor. We have experienced it firsthand over the last few years.

The preference for virtual-only AGMs also appears to be in contrast with the purpose of the Directive 2007/36/EC on the exercise of certain rights of shareholders in listed companies, which contains provisions aimed at facilitating and extending the possibilities of participation and the exercise of voting rights by the shareholder, rather than limiting them. 

For this reason, Shareholders for Change, as a network for shareholder engagement, releases this appeal. The appeal, inspired by ICGN’s Statement on Post Covid AGM Practices and Shareholder Rights, asks for a hybrid approach that allows both in-person and virtual participation by shareholders. 

A hybrid approach could replicate the in-person AGM experience most effectively, preserving constructive and democratic interactivity between shareholders and the board. Virtual-only AGMs should be reserved for extreme situations, especially audio only meetings, which limit facial expression.

In order to improve the quality of AGMs and the exercise of shareholders’ rights, we also ask for the use of reliable technology to allow democratic, secure, and efficient access for all participants and the removal of controls to prevent exclusion of unpopular views

Read here the full text of SfC’s appeal against AGMs behind closed doors or virtual-only.