Over the past two decades, as a financial journalist and commentator, I’ve attended close to 200 annual or extraordinary general meetings, ranging from micro-cap stocks to the biggest corporates in Ireland, as well as many high-profile companies in the UK.
I have had a ringside seat at stormy AGMs where eggs were thrown at the chairman, while at a meeting of a bank during the financial crisis, one shareholder attempted to storm the stage. Other meetings dragged on interminably for most of the day, and on one occasion I was the only external person at an EGM held two days before Christmas.
Loss of relevance
With the pandemic forcing companies to hold meetings online, this spring was the first time for almost two years that I have been present at a company AGM in person.
CRH is Ireland’s largest company by market value. Its annual meetings have always been well attended by retail shareholders but, at this year’s AGM, while the hotel ballroom could comfortably seat 400, only about 100 turned up. Despite a very impressive extemporaneous presentation by the chief executive, only one question was asked, which had no relevance to the business of the meeting.
Meetings are increasingly straying into territory that borders complete irrelevance
As anyone who has been to an AGM will know, investors meandering into areas that have little to do with the agenda is nothing new. But meetings are increasingly straying into territory that borders complete irrelevance.
Insurance company Aviva’s chief executive Amanda Blanc was subjected to several sexist remarks from shareholders, including one who told her she was 'not the man for the job'. Lloyd’s of London told its members they would be better off attending its meeting virtually for fear the location would be swamped by climate activists, and Shell was forced to pause its AGM after it was interrupted by environmental protesters chanting ‘We will stop you.’
We’re a long way from Berkshire Hathaway’s annual shareholder meeting, where tens of thousands of people fill a football stadium to listen to Warren Buffett’s pronouncements.
These occasions now run the risk of being hijacked
I know companies put in an incredible amount of time and money for these events. Chairs, chief executives and CFOs spend weeks in advance preparing their speeches and presentations. It is, perhaps, the only occasion where even the smallest shareholder has the same opportunity as the largest fund managers to praise or grill executives directly.
However, the era has long since passed when retail shareholders held sway over a company. Institutional investors have greater leverage and more opportunity to access executives. Serious matters are discussed in private, not in public.
Conventional AGMs now run the risk of being hijacked by groups looking to protest or, as is too often the case, by retail shareholders drifting away from salient points to personal gripes.
The era has long since passed when retail shareholders held sway over a company
Maybe it is time to reconsider how companies engage with investors, and perhaps virtual meetings should be the default. It allows those with a genuine interest to still ask questions, but limits the ability of troublemakers to overshadow the day.
It would be a shame for many people, particularly the regular attendees who turn AGMs into a day out. But is it now really the best use of company time and resources to hold meetings in person when technology can allow shareholders who take an active interest in their investment the same access? Reluctantly, I think it is time to make virtual permanent.
