Shareholders, significantly retail traders, are extra engaged than ever and need to have their voices heard, their votes counted and enter significant debates at an important shareholder occasion of the yr. We have already seen that attendance and engagement is increased than final yr, with traders asking extra questions than ever and fascinating in wholesome debate.
However, if this season has taught us something it’s count on the sudden. When disruption does occur, companies want to have the ability to take care of it successfully. The Financial Reporting Council (FRC) has been working behind the scenes to search out methods to assist deal with unruly behaviour at AGMs however proper now companies want sensible recommendation to handle this behaviour for the remaining season and past.
Separating engagement from unruly behaviour
There is a basic distinction between an unruly investor disrupting an AGM with inappropriate behaviour and an engaged shareholder who needs to carry a enterprise to account on its sustainability, range or government pay insurance policies. Thanks to headlines and up to date occasions at AGMs, some companies are understandably fearful about disruption. Yet companies can not lose sight of offering shareholders with a voice and should be open to offering a platform for debate and tackling the powerful questions.
Providing shareholders with a platform doesn’t imply abuse ought to be tolerated. To stop, or no less than deter excessive instances just like the Aviva instance, companies ought to take into account issuing a code of conduct forward of their AGMs – maybe as a part of the Notice of Meeting – to make clear that sexist feedback, swearing, racism or inappropriate behaviour won’t be tolerated, and members can be eliminated.
What issues most this season is that companies are offering engaged traders with entry to the AGM an opportunity to share their opinions in a significant manner.
Why making ready the chair is essential to success
A profitable AGM is very depending on an efficient chair main the dialogue, and who’s properly ready and goal. A scarcity of preparation leaves the chair open to pointless criticism and should result in a disruptive, ineffective assembly and potential reputational harm for the corporate.
To start with, make sure that a rehearsal is scheduled just a few days earlier than the AGM. This is the perfect time to iron out any technical points, go over the chair’s script, and make sure that they’re accustomed to the process from begin to end.
If the assembly is being streamed nearly, the rehearsal is a wonderful alternative to check the chair’s digicam and audio tools and make sure they’re comfortable on the platform. By guaranteeing all technical particulars are ironed out, the chair can deal with managing the assembly correctly, particularly within the unlikely occasion of disruption, fairly than on fixing technical glitches.
When main a gathering, the best way the chair conducts themselves ought to echo the professionalism of the AGM. They should respectfully handle disruptive shareholders and search to strike a stability between sufficiently partaking with shareholders and assembly the enterprise goals.
Shareholder engagement on the AGM is vital, and the chair should be snug with the Q&A session course of. Q&A periods have grow to be such an vital facet of AGMs lately (partly pushed by digitisation) that managing incoming questions, including construction to the method and ensuring the assembly serves its function is now vital to enabling debate on subjects corresponding to ESG or range.
Preventing points from overspilling
To meet the brand new calls for of an engaged shareholder group and the questions they’ve all yr spherical, firms should suppose past the AGM and proceed to put money into IR occasions. Providing a number of contact factors all year long ensures investor relationships aren’t left to fester, solely to overspill at vital conferences just like the AGM. Inviting administrators to make common contact with investor strongholds can even improve voting outcomes, due to a greater notion of transparency and a way of non-public reference to board members.
Delivering a joined-up programme of occasions is essential to bettering communication traces between board members and traders and quelling issues earlier than they spiral. Synchronising the work of company secretary and investor relations groups can also be key to strengthening the bonds between traders that ought to lead to constructive, tangible outcomes for companies.
While I don’t doubt disruption will proceed to make headlines this season you will need to bear in mind the unruly are the few, not the numerous and, in the end, efficient communication is the most effective path to tackling disruptive conferences.
Whether speaking your ESG commitments, offering easy accessibility to details about easy methods to entry the assembly, or just providing a number of touchpoints for engagement all year long – partaking with shareholders and offering them with a voice is the important thing to a profitable AGM.
Kerry Leighton-Bailey is director of shareholder engagement at Lumi
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