2021 in review - the year investors turned up the volume

In this article Peter Fowler discuss the marked change in shareholder engagement and attitudes towards AGMs.

The 2021 AGM season is unlike any other, don’t you think? Whilst people like me, writing blogs like this, have been saying: ‘this year is different to any other year’ since day dot, I can honestly say we have never experienced such broad adoption of digital meeting environments as we have in 2021.

Whilst 2020 was absolutely a red-letter year for our industry— our global teams were inundated with new requests to run virtual or hybrid AGMs— this year, we already have more meetings booked by the close of H1 than we did by the close of the year in 2020.

Whilst we rightly consider 2020 the catalyst year for digital, and hybrid AGM adoption, the spark of recognition that digital meetings environments were the future happened amongst investor relations professionals a year or two before the pandemic, as our technicians received more inquiries about virtual meetings than ever before.

For some issuers, however, due to last-minute cancellations and an AGM season already in full swing, there was no alternative but to batten the hatches and retreat into small meeting rooms to ensure the business continuity of their organisation. Whilst this measure ensured the legalities of the meeting remained intact, from conversations we’ve had with Investor Relations professionals, we know that many issuers are ready to embrace digital meeting environments to safeguard quality engagement experiences for shareholders.  

At this time last year, only 982 meetings had been conducted, with 23,785 shareholders in attendance and 60,945 guests. In the first half of this year, 2,756 meetings were conducted by Lumi worldwide, with a total of 180,360 shareholders attending, alongside 80,604 guests.

It’s not just the number of meetings taking place that has accelerated; shareholder voice has gotten much louder in 2021. The number of shareholders attending meetings has risen by over 400% since 2020; the Lumi platform welcomed 180,360 shareholders to their individual meetings in the first half of this year. The number of shareholder messages and questions received within those meetings has grown significantly since last year, with shareholders sending 49,472 messages.  

Whilst some technology providers have noted a downward trend in shareholder attendance this year, citing apathy amongst stakeholders, at Lumi, our global client base has experienced the reverse. Notably, the average number of questions asked at any given meeting has risen from 6 questions to a new high of 17 questions- a 180% increase from last year. When put into context and compared against 2020, a year broadly labelled as the year organizations ‘scrambled’ online, appetite for shareholder's voice has only grown, and not just amongst investors.

BlackRock, a global investment management company, this year defied directors at its recent AGM to usher through sweeping climate reform, which included support for three-quarters of the environment and social-focused resolutions filed by shareholders during the first quarter, including eight environment-focused votes. This move, from such a powerful organization, illustrates a decisive shift away from top-down management, highlighting a growing trend towards decision-making that incorporates shareholder voice and sentiment.

Whilst less frenetic than 2020, 2021 is no less fiery, particularly on key battleground topics. Here are the topics where shareholder's voice is loudest:

  • Financial reporting: remuneration and dividend pay
  • Environmental damage and climate change
  • Diversity and accessibility
  • Good governance

For many shareholders, this AGM season has been marked by a desire to impact the social conscience of the companies in which they invest. Notably, more shareholders than ever before have registered their dissent in response to board proposed resolutions, and dissent was particularly fearsome on the issue of remuneration.

For savvy issuers, shareholder voice might be the key to unlocking reputational gains, increased share value and to help refine and redefine the future mission and vision statements. When planning for innovation, forecasting budgets or agreeing on the goals of your business for the next five years, harnessing shareholder voice could be critical, particularly amongst retail investors. Not only can they help futureproof your organization against reputational damage and enhance decision making, shareholder's voice provides directors with a window into the mindset of customers and those who care most about the success of the business.

The only question is: is your AGM technology ready for the volume? Join us for our roundtable on Day three at 10.25AM for more insight and guidance about how you can successfully harness shareholder voice.

Peter Fowler, Managing Director, Lumi UK

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