5 days ago
City giants: Face-to-face annual meetings vital for share owner rights
Face-to-face shareholder meetings are 'a cornerstone of the financial system' and key to sustainable economic growth, a group of powerful City investors has told The Mail on Sunday.
In a big boost to this paper's push to stop annual meetings becoming online-only, the Governance for Growth Investor Campaign (GGIC) says it is 'vital' they operate 'in a way which allows for genuine interaction with shareholders'.
The Mail on Sunday is campaigning for all FTSE 100 companies to hold physical annual general meetings (AGMs) in the UK, and to make it easier for shareholders to vote via a platform or nominee so their voices can be heard – a move hailed by retail investor group ShareAction.
It follows a trend by firms such as drug giant AstraZeneca, defence contractor BAE Systems and toothpaste-maker Haleon to move their AGMs to a digital-only format, effectively barring share owners from attending in person.
On Friday, Nationwide came under fire at its virtual AGM for not allowing any of the 16 million members who own Britain's biggest mutual to attend in person, leading to charges that bosses were not being properly held responsible.
'Virtual-only AGMs make it harder for shareholders to hold firms to account and support the long-term value creation vital for sustainable economic growth,' said GGIC leader Caroline Escott.
'Hearing other shareholders' views, and being heard in turn, without our perspectives being filtered by management, is a key shareholder right,' added Escott, who is head of investment stewardship at train workers' pension fund Railpen.
The GGIC is an alliance of pension schemes controlling £150 billion of assets, including BT's retirement fund and the Church of England Pensions Board on behalf of 11 million members.
Escott added: 'The right of shareholders, as the owners of capital, to freely and genuinely engage with boards and executives is a cornerstone of our financial system.
'It's therefore vital AGMs are run in a way that allows for genuine interaction with shareholders.'
The move to virtual-only meetings is shrouded in legal uncertainty, with Ministers under pressure to clarify the law about the physical location of AGMs. A review is expected later this year.
Escott added: 'It's just one of the important shareholder rights that we must protect in the UK if we are to achieve the thriving UK companies, capital markets and economy that we all want to see.'
And it's good enough for Warren Buffett!
Directors tempted to stage digital-only annual meetings should follow the example of legendary US money manager Warren Buffett, says Ann Francke, head of the Chartered Management Institute.
The 94-year-old, pictured right, has turned the in-person meeting of his Berkshire Hathaway fund into 'the focus of his leadership'.
Each year, he outlines his strategy and decisions to 40,000 people who pack out an arena in Nebraska.
Buffett may be stepping back from his role, but his commitment to openness has won the loyalty of investors, transforming Berkshire from a small textile firm into a $1 trillion conglomerate. The event will continue under Greg Abel, his successor.
Francke said that in-person meetings show a willingness in bosses to be held accountable, adding: 'Directors need to be able to look shareholders in the eye: it's hardly much to ask and the process needs to be as inclusive as possible.
'I do believe that we behave differently when we are face-to-face.'
It also means bosses have to be more authentic, and cannot avoid awkward issues or angry shareholders.
