The Financial Reporting Council (FRC) has released new guidance for listed companies to enhance effective shareholder participation when planning and conducting AGMs. This is the first time the FRC has published specific guidance on the topic.
With input from a wide range of stakeholders, the guidance gives practical advice to help companies ensure that their AGMs are well-run constructive forums for effective engagement. It covers key aspects such as board engagement with shareholders, communication of meeting arrangements, using proxies, and voting processes.
Peter Swabey, Policy & Research Director at The Chartered Governance Institute UK & Ireland, said:
The AGM has always been, and remains, a fundamental element of corporate governance and both the march of technology and the pandemic have seen us look at delivery of the AGM in new ways. It is very helpful for the FRC to have captured the views of so many constituencies on the ways in which the AGM can deliver most governance value. Because that is, fundamentally, the purpose of the meeting.
I am delighted to see the publication of this useful guidance from the FRC. It is good to see the FRC emphasising that the chair should make every effort to make the AGM a forum for effective communication between the company and its stakeholders.
AGMs are also the most visible event for company secretaries. It is theirs to lose and the chair and directors will be critical if the day does not go well. These practical tips contain useful and sensible advice which will support both governance professionals and the board to manage these events well in listening to stakeholders and explaining the strategic direction of the company.
Historically, general meetings have been held in physical venues, however, since the start of the COVID-19 pandemic, many companies have now moved to a hybrid form of meeting using electronic platforms. The new guidance sets out actions to assist companies in making the most of new technologies to increase shareholder engagement.
Recognising that all companies are different, the guidance offers flexibility. Some companies have a small number of shareholders while others have many thousands in multiple jurisdictions, and companies will need to take different approaches and use different technologies and methods depending on their circumstances.
The full guidance is available here.
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Notes to Editors:
The Chartered Governance Institute UK & Ireland is the professional body for governance and the qualifying and membership body for governance professionals across all sectors. Its purpose under Royal Charter is to lead ‘effective governance and efficient administration of commerce, industry and public affairs’ working with regulators and policy makers to champion high standards of governance and providing qualifications, training and guidance. As a lifelong learning partner, the Institute helps governance professionals to achieve their professional goals, providing recognition, community and the voice of its membership.
One of nine divisions of the global Chartered Governance Institute, which was established 130 years ago, The Chartered Governance Institute UK & Ireland represents members working and studying in the UK and Ireland and in many other countries and regions including the Caribbean, parts of Africa and the Middle East. Website: www.cgi.org.uk
