Your 2021 AGM: enhance shareholder engagement using technology

Our team at EQS Group was involved in many of the virtual and hybrid AGMs last year from FTSE 100 to AIM companies, delivering streaming and Q&A solutions with or without live voting. Having already provided hybrid and virtual AGM solutions during non-COVID times, our team’s experience provided welcome reassurance to our clients.

Can we go one step further and really change the format of the AGM to better align with the purpose of the event and use technology to enhance shareholder engagement and make AGMs more inclusive? According to the FRC “All shareholders should have the ability to hear from the board before voting on resolutions, therefore it is best practice for companies to make every effort to ensure that shareholders should have the ability to vote following presentations from the board”.

Providing for live voting isn’t always feasible from a budget perspective, however the FRC have proposed a new approach: splitting the AGM into two events. The first for presentations, questions, consideration for matters in the Annual Report and the second for voting.

While departing from the traditional AGM, this definitely provides food for thought and is certainly possible given the existing digital solutions described above.

Going digital has many benefits. Shareholders save on cost and travel time, this also applies to the company, particularly for those who have geographically dispersed board members. The environment wins, an increasing concern for shareholders.

Going digital also makes the event more inclusive by allowing shareholders to attend from anywhere in the world. As stated in the FRC report, companies like Marks and Spencer (albeit with a large retail component of their shareholder base) saw a significant increase in shareholder attendance and engagement at their virtual AGM.

The fears surrounding going digital have also largely been reduced. Needing to ‘see the whites of the eyes’ of the Board has proven to be less important than initially thought. This has been helped by everyone becoming more comfortable using the likes of Zoom, Microsoft Teams, Facetime, etc. in their professional and private lives during the pandemic. The older generation have also increased their use of these platforms, an often-cited barrier to inclusiveness when introducing new technology.

Another fear around the company being able to sensor or edit questions from shareholders has proven to have some legs. This being said, best practice will no doubt emerge to ensure that shareholders and their questions are treated fairly regardless of the format of the AGM.

Finally, don’t forget your Articles of Association! The current relaxation of the Companies Act will not go on forever and if your Articles have not been adjusted to allow for the use of technology, it won’t be possible. Even if you don’t have any intention of using digital options in the near future, once the ability to meet in person returns, it’s a good idea to future-proof your Articles and your AGM.