FRC sets out best practice on AGMs and video in company reporting

The UK’s Financial Reporting Council has recommended boards increase their AGM engagement through a 'significant increase' in use of technology.

UK regulator the Financial Reporting Council (FRC) has set out best practice for company annual general meetings (AGMs). Its Financial Reporting Lab has also put forward ways for companies to engage with investors and other stakeholders through use of video.

The AGM guidance builds on earlier advice in April and in June.

The FRC said in its recently published report, Corporate Governance — AGMs: An Opportunity For Change, that during difficult times such as the pandemic, as “business models and long-term strategy come under increasing pressure”, it is critical for boards to continue to engage and where possible increase engagement with shareholders and other stakeholders.

“The traditional approach to AGMs is a straitjacket to progression,” the FRC concluded. It recommended instead there should be a significant increase in the use of technology that “facilitates robust virtual interaction” during an AGM, gives greater access for all shareholders, and ensures there is an opportunity to hold the board to account.

In the annex to the report the FRC provides advice for preparing now for AGMs in 2021, actions to be taken before the meeting, and how questions should be handled at the meeting. In addition, the advice covers webcasts and proxy voting.

Video in corporate reporting

The FRC Financial Reporting Lab’s Digital Future of Corporate Reporting explores current usage of video in AGMs and reporting and how it could be improved.

The options to consider to replace a physical AGM include:

  • Virtual AGM that completely replaces the physical meeting.
  • Hybrid AGM that combines a physical event with the ability to join virtually via phone or software.
  • Broadcast AGM, which is similar to a virtual AGM but limits interaction for attendees. It might also cover only a limited aspect of the AGM programme (often focused on Q&A and performance), with a closed meeting for official business and votes.
  • Either a video or audio recorded AGM of all or parts of the meeting (either physical/virtual or hybrid). “They provide those who cannot attend an opportunity to review the AGM and, if archived, provide historical transparency,” the FRC explained.

The advantages, the FRC suggested, for a more digital approach to delivering an AGM include:

  • It can reach a wider range of shareholders by not requiring attendance at a specific location.
  • It can also serve a wider purpose and can be used to communicate with potential and current stakeholders.
  • Videos can be both recorded and automatically transcribed, which provides additional value to those reviewing later.
  • It can be delivered at relatively low cost and on a short timeframe as compared to traditional venue-based approaches.

The FRC also advised on the regulatory considerations for using video in reporting, including the use of alternative performance measures in videos focused on company results. In the release of price-sensitive information, videos should “support the release but not act as the release itself”, and social media video use should be based on the principles of “clear, fair, and not misleading” messaging, the FRC said.

Oliver Rowe ( is an FM magazine senior editor.