Shareholder fear as firms consider whether to shun ‘physical’ AGMs

INVESTORS have voiced concerns over the future of annual general meetings as corporate giants scramble to decide whether to hold physical shareholder events for a second year.

Stock market stalwarts including Marks & Spencer and BT are considering whether to allow shareholders to physically attend their AGMs this summer as Britain eases out of lockdown.

Temporary legislation was introduced last year to allow companies to hold online-only AGMs due to the pandemic. The suspension, under the Corporate Insolvency and Governance Act, expired last week. However, Covid restrictions on public gatherings in England will not be fully lifted until June 21.

Rules for most companies state that an AGM must be held in a ‘place’ – meaning at least some company representatives must meet in person. Recently floated firms typically have shareholder approval for that definition to encompass a ‘hybrid’ meeting where board members attend in person while some or all of its investors view online.

Concerns are rising that retail shareholders will be less able to hold executives to account digitally and there are fears that technology could discourage older investors.

Companies have responded that screening an AGM online broadens the accessibility for investors – notably those overseas – and technology allows them to engage more readily.

Marks & Spencer, known for its AGMs at Wembley Stadium with up to 700 attendees, had already switched to a hybrid meeting preCovid in 2019 after receiving permission from investors.

It held a fully virtual meeting last year watched live by more than 1,500 people, with twice as many questions from investors as in the previous year. A replay was viewed by more than 5,000.

Chairman Archie Norman told The Mail on Sunday: ‘We wanted to make the meeting as accessible and interactive as possible. Feedback from our most regular attendees was overwhelmingly positive. It is our strong view that, in the long term, digital solutions can deliver more effective, more engaging and more accessible meetings for both shareholders and businesses.’

M&S will confirm arrangements for July’s meeting next month.

A BT spokesman said: ‘We are most likely to have a hybrid with shareholders joining the AGM online this year.’

Insurer Aviva will hold its AGM electronically in May and is deciding on its future AGM format which could include a hybrid or virtualonly meeting.

Telecoms giant Vodafone has decided to hold an in-person meeting and is exploring options to additionally screen it online.

NatWest and Lloyds Banking Group, usually among the best attended meetings, will be holding virtual shareholder engagement events for the first time before their online AGMs this spring.

It is understood that Tesco’s governance rules do not allow the retailer to hold hybrid meetings.

Morrisons said: ‘In the future technology may play a part in voting and attendance, but we have every intention of keeping our AGM as a principally live event.’

Sacha Sadan, director of investment stewardship at Legal & General Investment Management, said: ‘We recognise the value of physical shareholder meetings and are not supportive of virtual-only AGMs.’

Ashley Hamilton Claxton, of Royal London Asset Management, said: ‘Getting rid of in-person AGMs completely could be a step backwards for corporate governance and accountability.’

City sources said this year attendances would depend on confidence in the effectiveness of vaccines.