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Annual General Meeting Trends 2017

12 September 2017

Equiniti has published its annual review of trends and developments during the 2017 AGM season

The review formed the backdrop of this year’s AGM Forum that takes place in September, delivered by Equiniti’s Lisa Graham and Prism Cosec’s Chris Stamp.

The 2017 AGM Trends Booklet is the annual review of trends and developments during the 2017 AGM season compiled by Equiniti’s Registration Services and Company Secretarial teams.

Within this year’s trends report Equiniti discusses AGM logistics, electronic general meetings, business of the meeting and much more.

Politically the past year has been turbulent. The results of the EU referendum and the snap general election caught many businesses unaware. Brexit will have implications for the operations of many businesses but the extent of these are still unclear given the ongoing negotiations. In business, the scrutiny over executive remuneration continued and some came under challenge for their working practices. Did these macro events feed through to considerations and areas of concern for shareholders when reviewing company performance and voting at the AGM?

Whilst the nature of most of the formal resolutions passed at the AGM do not perhaps lend themselves to being a barometer of change, investor relation bodies and shareholders can register their concerns and bring pressure to bear when voting on resolutions to approve the annual report, remuneration reports and re-appoint directors. In addition, the nature of shareholder questions is often a reflection of investor and broader stakeholder concerns.

AGM logistics are key to begin planning the AGM in the corporate calendar. An enormous effort is made by companies to ensure that their AGM is held at the right location, at the right time, for the right cost.  Only one company in our survey held an electronic AGM in 2017.  However, interest is undoubtedly growing with a number of companies submitting changes to their Articles of Association for approval by shareholders to enable general meetings to be held electronically. A review of shareholder questions asked at FTSE350 AGMs reveals some interesting trends, companies who operate in a sensitive sector such as mining or pharmaceuticals will receive a greater number of questions and interrogation from shareholders. Common questions were around strategy, the annual report, dividend payment and results, executive and employee remuneration and Brexit.

Voting methods are a consideration with the vast majority of FTSE100 companies voting by poll at their AGM. The increase away from a show of hands towards poll voting amongst FTSE250 companies increased substantially with a smaller increase for mid/small cap companies. A step towards digitisation is notable for companies who no longer send a paper proxy form to their ‘web default’ audience who have seen a significant increase in the use of online voting.

Future Trends
The past year has seen a general focus for businesses on ensuring fair pay and conditions for all. It will be interesting to see the impact of the Taylor Review – ‘Good Work: the Taylor Review of Modern Working Practices’ on Government thinking. As noted in the Government’s recently published response to its green paper on corporate governance reform, a package of new measures will be introduced to strengthen the UK’s corporate governance system further. 

Our analysis of 2016/2017 AGMs has highlighted some trends to consider when planning 2018 AGMs:

  • A widening of shareholder rebellions from just remuneration issues to other areas of concern over governance such as over-boarding and director independence.
  • Remuneration issues continue to be of concern to investors where they perceive bonuses and pay rises are unjustified by performance.
  • Ongoing concern over governance issues and ensuring companies are properly run is reflected in areas such as directors having sufficient time to carry out their responsibilities.
  • Shareholders are willing to take action in specific cases of high profile accounting or management irregularities.
  • A continued interest in exploring electronic meetings.
  • A focus on non-financial reporting largely due to regulatory changes and the expectations of investors and stakeholders.

Lisa Graham, Registrar, Equiniti commented ‘’It’s been an interesting AGM season and I’m pleased that the Meeting Management Team have been able to support companies through some challenging times. Looking to the future, with further digitisation on the horizon I look forward to seeing how the AGM evolves over time.

To read Equiniti’s full report please click below.

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