Are You Ready for the AGM Season?
Proxymity held two webinars in February 2022 for Issuers about the upcoming AGM season, Kirsty Anne Jasper joined the call and listened to the panel discussions.
Time has worked in unusual ways over the past two years, with many things appearing to have stagnated, whilst simultaneously vast alterations to the world we live in have occurred. Nonetheless, some things never change, and so AGM season has inevitably rolled around again!
This year changes have occurred to the status quo. As such Proxymity hosted two webinars about the season with their Head of Business Development, Michael Kempe; Link Group’s Head of Industry, Jai Baker; and Computershare’s, Manager- New Business Initiatives, John Botha, discussing issues impacting company general meetings in the UK and year-end reporting in 2022, and how companies might best account for them in their planning. Whilst in the following week we turned our attention to the European market, where we were joined by; Computershare’s Managing Director – Head of SRD II Project, Pedro Saá; Peter Fowler, Managing Director, Lumi and, once again, Proxymity’s Head of Business Development, Michael Kempe.
AGMs in a Post-Covid world
The discussions revolved around examining how, as we finally begin to move out the pandemic enforced restrictions, the ecosystem has fundamentally and irreversibly changed. The panel looked at how this is likely to have a monumental impact all meetings going forward, both in the UK and EU. This discussion included aspects such as the use of technology to support governance efforts and practical considerations for an AGM in a post 2020-COVID environment with the evident increased focus on stakeholder engagement.
In the European webinar Michael Kempe outlined the fact that we are living in an era of unprecedented change. He highlighted an industry-wide desire from issuers and investors to engage, connect and communicate in an effective way. Pedro Saá concurred with this sentiment and stated that the coronavirus pandemic has acted as a catalyst for the technological changes that the industry was already preparing to adopt, hastening its implementation from an anticipated 6–8-year period.
Technology has played a huge role in how AGMs have functioned over the past few years and the UK webinar took the opportunity to look at how this has been implemented both pre-meeting and within the meeting itself. Michael Kempe described how he sees the current landscape as moving away from an industrial society to a digital one. Reliance on and an expectation that virtual meeting software, investor apps, digital questions, new proxy voting systems and hybrid formats will all be available, were all highlighted as key technological changes that the 2022 season is likely to bring.
Technology has enabled Hybrid AGMs as the default position
Peter Fowler concurred with this stance in, claiming that there has been a move towards almost exclusively virtual set-ups across all jurisdictions. He claimed that the benefits of this have been huge in terms of engagement and the convergence of corporate governance and investor relations, in both the build up to the AGM and within the meeting itself. Looking to the 2022 season Fowler saw hybrid as the new default position as investors and issuers have seen the limitations that the previous system had and Kempe and Saá were firmly in agreement, with Saá claiming that the ultimate goal for issuers is to provide a level playing field between the physical and virtual experience.
Within the UK these changes are being driven by investors. Computershare’s John Botha claimed that the pandemic has given the opportunity for companies to take a deep-dive into shareholder behaviour. With only 4.9% of listed shareholders currently voting, now is a chance to build engagement.
SRD II Compliance and shareholder disclosures
Legislation has also played an important role in changes to the AGM season with both the revised European Union Shareholder Rights Directive (SRD II) and local legislations playing a part. Saá also acknowledged the significance of ESG and the role that that plays in driving greater engagement between investors and companies. He anticipates the biggest changes to AGMs will come from an increase in the number of votes at meetings, more technology-based solutions, and a bigger role from retail shareholders. The importance of disclosures was also highlighted by Saá, with Kempe agreeing and claiming that it has, in recent years, almost become a standard part of the AGM process.
Across both webinars, the issue of late votes was key. With both issuers and investors alike suffering due to inefficient or delayed communications which have been extremely problematic for issuers as votes only arrive at the last minute. Thankfully, the increased adoption of the Proxymity platform has gone a long way towards resolving this issue with the majority of votes now reaching issuers at least two days before the market deadline.
ESG – the most important expectation from Investors
This shifting focus towards ESG and stewardship has also changed expectations around AGMs in the UK. Botha explained that there has been a societal shift towards more interest in ESG matters and Link Group’s Jai Baker highlighted access as the most important expectation from shareholders. Virtual meetings and proxy voting systems such as Proxymity Vote Connect facilitate this change by offering inclusivity, a reduced carbon footprint, a safe environment and increased meeting attendance.
Ultimately, the panel agreed that investors and issuers across the UK and EU are expecting more from this year than ever before. The use of multiple technologies appears to be the way that this will be achieved, and the post-pandemic ecosystem will evolve to give stakeholders greater transparency, communication, and efficiency.