The future of the Annual General Meeting

There is a lot of discussion about the future of the AGM, and I thought it might be useful to flag a few pieces of reading which will be of value to those with interest in this area.

Back in October 2020, the Financial Reporting Council published Corporate Governance AGMs: an opportunity for change – (23 pages). This was a review of the way in which companies managed their legal obligation to hold an AGM in the light of the restrictions introduced by the need to respond to the COVID-19 pandemic. This was a very interesting paper which clearly demonstrated the adaptability, innovation and pragmatism that so many of our members have shown in maintaining governance standards in the most challenging circumstances. Our members have held legally compliant general meetings in car parks, fields and front rooms when their planned venues became unavailable, and as the FRC found, most have worked hard to ensure opportunities for shareholder engagement.  It has been striking how members have learned from each other, and I am sure that next year’s AGMs will be very different.

But not everyone did that as well as they might, and the FRC provides examples of good and poor practice. The paper goes on to look at what the AGM might look like in the future. The FRC has established a working group to discuss what this might look like, on which I am representing the Institute.

On 26 January, Share Action published Fit-for-purpose? The future of the AGM - (22 pages). This is an interesting and thought-provoking paper, albeit one looking at the future of the AGM from a particular perspective. The opportunities that Share Action see for enhancing the value of the AGM for shareholders and other stakeholders must be balanced against the costs that they create for companies, not all of which are necessarily a good use of shareholder’s funds.  And the solutions must be proportionate to the benefits that they bring.

Finally, on 28 January, GC100, the Association of General Counsel and Company Secretaries working in FTSE 100 companies, published a discussion paper: Shareholder Meetings – Time for Change? - (21 pages). This is another thought-provoking paper looking at the way in which the AGM could be enhanced through the use of new technology.