When did you last attend the annual general meeting (AGM) of a company you have invested in? On average, less than 1 percent of shareholders attend annual general meetings.

This is a surprising statistic. Particularly when you consider that an AGM is the primary forum for company directors to address shareholders. And vice versa.

Annual general meetings are essential to good governance.

When shareholders exercise their right to vote and ask questions, directors have an opportunity to understand their needs.

ASX listed companies spend large amounts of time and money on shareholder meetings. Preparation for the meeting requires input from the board, executives and the company secretary. Mail-outs of the notice of meeting, venue hire and other services can also result in significant costs.

Boards need to ensure a return on this investment. The time and money spent needs to result in the productive engagement of shareholders at meetings.

Is it worth an investor’s time and money to travel to a physical location to listen to a highly procedural meeting? Is the inconvenience too much? Directors need to consider this.

The continuous disclosure laws for ASX listed companies mean that a company’s financial results, business strategies and future prospects are usually available online before the meeting.
So, why should shareholders attend the AGM? What will encourage them to make the effort to turn up?

Many companies are considering how technology can improve meeting accessibility.

The innovation of a hybrid AGM means shareholders can take part from a remote location. Shareholders attend, vote and ask questions by connecting electronically.

ASIC strongly supports the use of technology in AGMs to enhance shareholder engagement – as long as the company’s compliance with its obligations under the Corporations Act 2001 is not impacted.

Even if virtual AGMs improve shareholder accessibility, it is the content of the meeting that needs to engage. Some ASX listed companies are changing the traditional format of the AGM to do this.

For example, at Macquarie Group’s 2016 AGM a scheduled adjournment meant shareholders could ask questions on a more personal and informal basis. BHP Billiton and Telstra Corporation also held sessions, separate to their AGM, particularly for retail investors to hear from management and ask questions.

Retail investors want to learn how industry conditions are affecting the company and what their strategies are.

Companies need to ensure their AGMs are relevant for attendees if they are to engage them. Making the meeting interesting helps too.

How will you increase shareholder engagement at your 2017 annual general meeting?

For further information on rights of shareholders at meetings, see ASIC Information Sheet 47.

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