Logistics, such as time, location and venue need to be considered in order to plan a successful AGM. Each year, Equiniti oversees more than 300 AGMs, from advanced planning through to results. We have combined our expertise with a panel of experts to put together some top tips to help you stage a successful AGM.
There are many factors that you should consider when choosing your AGM location, especially when it comes to accessibility. Jonathan Lloyd, Group Company Secretary at Tesco feels it is important that all shareholders should be allowed access to an AGM. As a result Tesco has held its AGMs in London, Birmingham, Cardiff and Nottingham. Gathering feedback on the meeting’s location will prove useful when choosing where to hold future AGMs. Tesco took this approach and discovered that main cities worked well. As Jonathan says, it is always worthwhile bearing in mind your timings: “Always ensure you think about the timing of the meeting. Many shareholders will have travel limitations, for example off-peak railcards, so won’t be able to get to a London AGM for 9am.”
When considering the size of the venue to hold your AGM, revisit the past year’s press coverage. This should give you a good indicator as to whether or not your turnout is likely to be high and the size of venue you will need. Lisa Graham, who heads up the AGM team at Equiniti, says: “The facilities within your chosen venue should have accessibility front of mind and don’t underestimate the importance of refreshments to shareholders.”
Companies listed outside of the UK may choose to hold dual meetings via satellite link, at an hour suitable to both time zones. Voting can take place in both locations or one or the other, as long as the shareholders are fully informed. An alternative to a dual location AGM is to alternate countries every other year.
What important factors should you consider when preparing for the Q&A and Chairman’s script? Jonathan commented that at Tesco, a lot of attention is placed on the Q&A because of the wide range of topics the Chairman could face. To ensure he is adequately prepared, Jonathan pulls together a strong team from across the business to highlight all of the information the Chairman will require. “Keep it brief,” Jonathan says. “Ideally, you should be looking at one or two pages per topic. Pay close attention to press cuttings in the months running up to the AGM, as well as monitoring customer correspondence, and if possible, resolve any outstanding issues prior to the AGM”.
Asking for questions to be submitted prior to the AGM is a sensible idea. It will allow you to at least prepare some answers, however a lot of shareholders prefer to ask their questions on the day. How shareholders put questions to the board at the AGM should also be considered, and using new technologies could make the process easier. In the past, Tesco has had a team of experts behind the scenes, ready to provide real-time answers to the board throughout the AGM. Gareth Roberts, Partner at Herbert Smith Freehills, who has been advising for over 30 years says: “Although shareholders have a statutory right to ask questions at an AGM, you can prepare the Q&A document ahead of the meeting for questions that you are expecting, and place it on your website. You can direct people to this resource during the meeting.”
There should be a very clear steer on the security and admittance policy, which should be communicated to shareholders prior to the meeting. If you feel your AGM could be particularly contentious, bag checking could help to deter anybody likely to thwart security measures.
Unfortunately it is difficult to plan ahead and manage organised disruption at AGMs. Those looking to cause disruption are becoming ever more sophisticated in both the means and the method of getting their point across. Gareth recalls a recent AGM whereby individuals within the audience took turns to stand up and disrupt the meeting aggressively. Since the activists were dressed in normal business attire and because they left breaks in between the disruptions to allow for the room to settle, they could not be easily identified and asked to leave.
In terms of voting, there are different options as Lisa explains: “Some companies, particularly those in the FTSE250 and below are still using a show of hands whilst the vast majority of the FTSE100 take the vote on a poll. You have a choice of paper or electronic voting and we experience a mix of both types of poll voting.
“Paper polls can be a lengthy process, and can often lead to higher invalidity rates whereas electronic voting gives you an immediate result,” Lisa says.
Tesco currently uses an electronic voting system and is potentially looking to move to an enhanced version in 2015, Jonathan says. “Providing real-time results adds a short amount of time to your AGM, however in this technical age the expectation is fast moving towards providing real-time results.”
Real-time results can only be achieved via electronic methods, and with Equiniti releasing their enhanced electronic voting system this year the process will be refined even further.
To speed up the voting process, all questions around main resolutions should be covered in the Q&A.
Closing top tips
An AGM is an important outward facing event with many positive PR opportunities, particularly with the advent of journalists tweeting live from ‘high interest’ AGMs.
Make sure you know what the press and your customers are saying about you and fully brief the Chairman. This will reduce the chances of you being caught out by organised activists.
Ensure your Board is engaged with the audience and the shareholders and minimise potential disruptions – asking people to turn off their mobile phones is always a good idea.
The most successful AGMs are such due to the planning and preparation that has gone on behind the scenes. And always remember, failing to prepare is preparing to fail.
For more information on any of these topics please contact your relationship manager.
Ezine issue: January 2015
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