Shares can be held by individuals in several ways such as in certificated form, digitally, and often through an investment platform. How you vote will depend on how your shares are held. This article aims to set out how a shareholder can vote at a company’s annual general meeting (AGM) taking into account how your shares are held.
What does it mean by voting at an AGM?
As a shareholder, you are a partial owner of a company and voting allows you to have a say in the governance and future of the company. Voting at a company’s AGM is one of the processes by which you can have that say.
What is voted on?
Shareholders can vote on key areas that are proposed at AGMs as resolutions. These resolutions can include the appointment and reappointment of directors and auditors, approval of a company’s financial statements and annual report, and approval of directors’ pay. There can also be special resolutions in relation to mergers and acquisitions and changes to company policies.
Why is it important to vote?
There are several reasons why it is important to vote at an AGM. It gives you influence over decisions such as those mentioned above thereby protecting your interests. Voting also helps to hold the board of directors and management accountable for their actions and decisions. For instance, you can express your approval or disapproval of the pay of executive directors or the company’s performance. In addition, attending and voting at an AGM can give you some insight into the company’s operations, strategy, and challenges and it’s an opportunity to ask questions and engage with the company’s leadership.
As an individual shareholder, you may have a smaller stake compared to institutional investors, but collectively, your votes can carry significant weight and can change corporate policies. For instance, you can use your votes to support resolutions that align with your values such as addressing climate change or social concerns.
How do you vote?
It is not as difficult as you might think.
In person
You can attend the AGM in person and vote on any of the resolutions that are proposed at that meeting. This could involve a show of hands, completing a poll card, or using voting devices provided at the venue.
You don’t need tell the company that you are attending, you just need to turn up at the right place and right time but you’ll need to bring along some identification to verify your entitlement to vote.
You’ll also need to make sure that you have the shares registered in your name on the register of members by the date and time specified in the notice of meeting.
By proxy
If you’re unable to attend the AGM in person, you can appoint a proxy to vote on your behalf. A proxy is essentially another individual who attends the meeting instead of you and casts your votes. Often it is the chair of the meeting who collates the responses of all the shareholders who have appointed them as their proxy and votes following those instructions. Instructions on how to vote are provided by the company or sent with the AGM Notice. If you decide to use this route, it is important to know that you’ll need to submit the proxy form by the deadline specified in the AGM notice of meeting. This is usually 48 working hours before the time and date of the meeting.
Through investment platforms
If your shares are held through an investment platform, for instance, if you hold shares through an any investment/broker platform such as an ISA, you’ll need to provide voting instructions through that platform as they will be held in a nominee account. Most investment platforms provide a means to vote electronically and will have their own deadlines for receipt of voting instructions so it is important to contact them to understand this.
If you want to attend the AGM in person and vote, you’ll need to contact the investment platform to understand their process. Some will provide a letter of representation which you’ll need to take with you to the meeting. The letter will confirm the nominee name that your shares are held under and the number of shares that you are entitled to vote at the AGM.
Shares held in a discretionary portfolio account
If your shares are managed by a discretionary portfolio manager, generally, the portfolio manager has control over the shares and may also have the authority to vote on your behalf. If you wish to vote, you should contact your portfolio manager to understand your voting rights and how you can vote. Some portfolio managers may offer online portals where you can input your voting instructions.
Shares managed by an advisory portfolio manager
Unlike a discretionary portfolio manager, an advisory portfolio manager does not automatically make decisions on your behalf. You keep full control over voting rights and the advisory portfolio manager may give you some recommendations or insights on how you could vote. You have responsibility to cast your votes directly which can be done in person at the AGM, by proxy, via postal vote or online. You may also need a letter of representation to vote directly or attend the AGM if the shares are held in a nominee structure.
Shares held through an Employee Share Scheme
Employee share schemes allow employees to own shares in the company they work for and, in many cases, come with voting rights. Shares can be held various ways such as directly by an employee, through a nominee company or by trustees on behalf of employees. The voting process depends on the type of scheme and the company’s governance structure. You should contact your share scheme plan manager to understand how you can vote.
Online or Postal Voting
Many companies also offer electronic or postal voting options. This is typically managed through a company’s registrars, such as Equiniti. Registrars manage the company’s share register and help companies communicate with shareholders including voting processes at AGMs. You can find details of the registrar on the AGM’s notice of meeting or on the company’s website.
How to vote where Equiniti is the registrar
Where Equiniti is the company’s registrar, you can vote by post or through Shareview, the online platform.
Shareview allows you to manage and monitor your shares all in one place. On the platform, you’ll find information about the AGM including the notice, agenda, and resolutions and can cast your vote against each resolution.
Online can be one of the easiest ways to vote so it is worthwhile registering.
You can find further information on registering for Shareview here. Equiniti Shareview | Home
An example of why it is important to vote.
A well-known activist hedge fund, has recently targeted several UK investment trusts, with the aim to replace the boards to address certain issues such as underperformance. Shareholders were mobilised to vote and it resulted in overwhelming votes against the hedge fund’s resolutions.
This is as an illustration of the critical role of shareholder voting and serves as a reminder that shareholders hold significant power to shape the direction of a company.
Annual General Meetings
Supporting the AGM programme, at every stage.