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The Practicalities Of Digital AGMs

Thursday, 15 October 2020

We look at how businesses have adapted AGMs this year and how this has accelerated the focus on going hybrid.

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. 

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Looking over the data

The FRC analysed 202 FTSE350 meetings that occurred between the 10th of March 2020 and the 30th of July 2020.

The research found that 163 companies held closed meetings (80.7%), 30 companies held open meetings (14.9%), and only one meeting was adjourned. Eight others confirmed they went ahead as originally planned with no disruption (4%).

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.

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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.

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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.

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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.

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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.


What have we seen at EQ?

Hybrid AGMs were a rarity at the beginning of this year. We saw a slow increase as 2020 progressed through the pandemic and now have many more enquiries for 2021 meetings. The slow uptake is likely because running a hybrid AGM requires additional planning and a level of investment, which corporates may not have been prepared for at the beginning of the year.

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From this insight, we predict that the physical AGM will return, but that there will be a move towards holding hybrid AGMs or at the very least for companies to provide some means of participating remotely such as the use of webcasts.

Interestingly, many companies already have a provision in their Articles which enables them to hold this type of meeting.

Companies carefully considered the technical procedures and compliance with the Companies Act and the Company’s Articles, such as establishing a quorum with no physical attendance permitted, opening and closing the meeting, question submissions, proxy appointment and voting. 


M&S Digital AGM 2020

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.

Hosting A Successful Hybrid AGM

In this webinar we take a look through at the Lumi platform, and how its functionality can work for you and your meeting.

Watch Now