Companies use Covid restrictions to silence shareholders

COMPANIES SEEKING finance are required by law to account to their investors.

This does not mean just posting a set of accounts and a report but holding an annual meeting where the directors can be questioned and their financial supporters informed.

Some have used Covid- 19 as an opportunity to move to holding their AGMs in a closed manner. Over 80 per cent of FTSE 350 companies have taken such action. It has meant voting by proxy had to be conducted in advance of the meeting.

The next stage for virtual meetings has been to disenfranchise investors. The Financial Reporting Council ( FRC) says almost one- fifth of companies holding closed meetings made no arrangements for any shareholder questions. This was clearly no oversight.

Shareholders need to understand decisions made by their board and its plans for the future. Analysts who advise investors and pension providers should be able to question. Brokers and wealth managers who guide clients and in many cases act for them should have the opportunity to query decisions and have an open dialogue with the board.

Far too many companies are taking a dystopian view. Instead of the sybaritic chairman using such a public forum to be a corporate panjandrum, the company secretary can arrange an exiguous few lines are read out. New technology is inevitable but it needs to be accompanied by “robust virtual interaction”, in the words of the FRC. This is the independent regulator for accountants, actuaries and auditors. It rarely bears its teeth so obviously.

If this body cannot persuade democracy to return to the AGM, the Government should enact legislation to protect everyone who has an investment or private pension. The shareholder voice should not be silenced.