The latest FRC report on Corporate Governance and AGMs
On the 6th of October, the FRC released a report on AGMs looking over learnings from the impact COVID-19 has had on this season's meetings and the opportunity this presents for future change. The report focuses on communication, engagement and technology, going as far as recommending that shareholders provide email addresses. It also acknowledges the possibility that social distancing restrictions may still apply into the 2021 AGM season and asks companies to prepare.
For those that held closed meetings, over 80% made arrangements for shareholders to access Q&As with the Board, but also noted that 30 companies did not appear to enable shareholders to ask the Board any questions before or during the meeting.
Looking at the companies who held open AGMs, the report found that 60% were facilitated through webinars or audiocast with live voting capabilities.
Four areas of best practice from the FRC
To ensure governance is adhered to, the FRC report went on to provide learnings from the 2020 season with some best practice guidance for 2021.
- 1. Prepare Now
- 2. Keep shareholders informed
- 3. Make your digital platform accessible
- 4. Capturing the votes
1. Prepare Now
This means considering what you may want to change next year and acting on it now, whether that means increasing the use of technology (and speaking with the experts), planning for the failure of any digital solutions and/or amending your Articles.
2. Keep shareholders informed
The FRC recommends creating a dedicated area of the company website for keeping shareholders informed of your AGM status. Companies should also provide additional information on how to submit questions for the AGM within the Notice of Meeting. If companies hold a digital meeting, they need to issue registration/verification details in advance via the shareholder’s preferred method of communication.
3. Make your digital platform accessible
The running theme with digital meetings is the importance of ensuring all shareholders can access the platform with technical support being on-hand in the event a shareholder is having difficulty. Companies should include clear instructions on how to access the meeting, including all log-in details as well as explanations on how shareholders can vote.
4. Capturing the votes
Companies should ensure that shareholders are clear on when and how to vote. Companies should issue guidance on proxy voting, delivered within a reasonable time frame via both paper and electronic forms. Companies should also remind shareholders of upcoming deadlines, allowing shareholders to change their vote.
Earlier this year, M&S held their first fully digital AGM with over 1,500 shareholders engaging online, asking over 80 questions to the Board. In this interview, we delve into the reasons why M&S went digital, how the AGM played out and what the future of their AGM may look like.
In this webinar we take a look through at the Lumi platform, and how its functionality can work for you and your meeting.