The joy of the in-person AGM

By Robin Tozer

The Times today has reported that UK investors are returning to in-person AGMs after the pandemic forced everyone to go virtual. While globally more than a quarter of AGMs are still held remotely, in the UK, Ireland and the Channel Islands, only 6.5 per cent were conducted entirely online, according to registrar Computershare.

On the one hand, it feels like we should have moved away from in-person meetings in 2022. Virtual alternatives are better for the environment, allow greater participation and save the Company the cost of venue hire, security and catering. Shareholders should be keen on cost savings. It seems inevitable that Meta will have an AGM entirely in the metaverse soon, with an avatar of Mark Zuckerberg addressing thousands of shareholder avatars.

Part of me has always viewed the in-person AGM as an anachronism not fit for the modern age. However, I confess I have missed them after a couple of years away. In an increasingly virtual world, it seems a good idea for directors to be in the same room as the owners of the Company, no matter how small their stake is. It helps foster accountability and a better connection with small shareholders.   

Over the years, I have attended dozens of AGMs, big and small. I have been in tiny rooms in lawyers' offices where it's just a few board members and me, and while working for big FTSE 100 companies, I have helped organise AGMs at huge venues. Months of planning and a cast of thousands. More putting on a West End show than a business meeting. I remember sitting in one AGM where no one had turned up, and the CEO read out the names of the shareholders who had voted against his re-election with the words, "I am now about to rain on the parade of the following". Except he didn't say rain.

What often surprises me is the disconnect between the media write-up of an AGM and what actually happens. I have been at AGMs presented as 'stormy' and 'heated' by the media. While, inevitably, there is a question or two about the issue at hand. Executive Pay and 'rewards for failure' being the topic over the years to get the most attention. However, small shareholders rarely stick to the script. Their interests are varied, and their focus can be niche. What's always interesting is the vast array of questions that get asked. I have often had to prepare Q&A documents for the Board to get them ready. For every question about the remuneration or share performance, you will be preparing an answer: about the Indian Caste system, the performance of Bristol City, what happened to the giant cookies that used to get served, or whether the company is getting enough use from its box at Lords Cricket Ground. At most AGMs, there will be a retired accountant who claims to have spotted a mistake in Note 14 on Page 238 of the Annual Report leading to directors hastily thumbing through the expensively compiled report praying they aren't right.

AGMs can often attract demonstrations which can also bring the media. Banks and insurance companies are targeted for what they might be investing in, like fossil fuels or arms companies. As an organiser, you must think about how you can get the Board in and out while avoiding the demonstrators and the camera crews. There are numerous places you can hire with secret tunnels and hidden entrances. One time working for a bank, our quest was greatly helped when the demonstrators and the TV crew they convinced to join them stood outside the wrong building!

Recently, media attendance at AGMs has dropped, reflecting their time pressures. In the past, many AGMs could expect a journalist or two to turn up to see if there might be a story. A friend of mine worked for a small company that had had a rough time. Still, he was surprised to see a Telegraph journalist turn up at the AGM. After a while, the journalist got up to leave as nothing interesting had happened. My friend breathed a sigh of relief. Just as the journalist reached the exit, two of the Directors began to have a big row, and with that, the reporter's notebook came out. 

Now the media only attend the biggest AGMs and ones where there is almost sure to be an issue. An activist investor is demanding change, a company is in trouble , or there has been a problematic remuneration report. Inevitably, someone at the Company will suggest that the media be banned from the AGM as "its only for shareholders" in an attempt to prevent the coverage. This is the best way to ensure a bigger media attendance. Journalist will buy shares or get shareholders to give them a proxy so they can get in. Telling a journalist they can't come to an AGM is, in effect, issuing them a challenge: "Do all you can to get into this AGM and write a big story about how you defied the ban."

One of the great joys is watching shareholders and Directors mingle at the end while enjoying the catering. Small shareholders often know each other, meeting on Bulletin Boards to discuss the stock's prospects. AGMs are a chance to meet up with each other in person, which can happen over several AGMs. There are a few shareholders I have got to know over the years as they have attended multiple client AGMs of mine. One even sent me wine suggestions to improve the selection! Many directors know their smaller shareholders well and like to get a feel for their thinking at the AGM.

Alcohol is a mixed blessing at AGMs. One FTSE100 I worked for had a blanket on its AGM checklist, as we were still scarred by the time a shareholder emerged from the toilets sans trousers. People were scrambling to find something to preserve his decency. I witnessed one shareholder throw up on another. 

Food and drink can disappear quickly. I have seen shareholders load sandwiches into Tupperware containers to take away, and one poured orange juice into one of those water bags people take camping. 

At the bigger AGMs, Directors will be assigned a chaperone for the mingling, often from the press office. The press officer's job is to help keep them circulating and stop anyone from monopolising their time. Also, it is to get them away from tricky conversations. There's nothing like watching an incredibly well-paid American Bank Director face a man angry that the branch in his village in Norfolk has been closed.

At some point, the in-person AGM will become a thing of the past. However, until then, I intend to enjoy them.