UK regulator the Financial Reporting Council (FRC) has set out guidance for listed companies to enhance shareholder participation in annual general meetings (AGMs) and other general meetings.
The guidance is designed to help companies on topics such as board engagement with shareholders, communication of meeting arrangements, using proxies, and voting processes.
"Getting shareholders more closely engaged with their investment companies is one of our members' top priorities, and AGMs are an important opportunity to do that," Richard Stone, CEO of the Association of Investment Companies, said in a news release. "This guidance is helpful and timely, offering practical advice about how to make meetings work better for shareholders in a post-COVID world, whether they are attending virtually or in person."
Here is a summary of the FRC's seven principles with example actions to help enable effective shareholder engagement:
Before the meeting
- Clear communication. Provide detailed instructions to shareholders on attending and participating in the meeting — online or in-person — asking questions, and voting.
- Practical engagement. Explain to shareholders how the meeting will work — how and when to submit questions and how questions will be answered.
During the meeting
- Relevant updates. Address issues that have been raised throughout the year, particularly by investors and stakeholders.
- Real-time Q&A. Provide online functionality for real-time questions by voice during the meeting or in writing/electronically.
- Ability to vote. Provide shareholders with the option to vote in real time or via the appointment of a proxy, either in-person or virtually.
After the meeting
- Practise transparency. Allow follow-up questions, answer any outstanding questions in writing, and provide a recording of the meeting for those who could not attend.
- Continuous engagement. Update shareholders on company matters throughout the year, ensuring they have access to similar information, via the company website, engagement days, and recordings or slides from meetings or events.
The guidance offers flexibility because all companies are different, the FRC said. Some companies have a small number of shareholders while others have thousands in multiple jurisdictions. According to the guidance, companies will need to take different approaches and use different technologies and methods, depending on their circumstances.
— To comment on this article or to suggest an idea for another article, contact Kevin Brewer at Kevin.Brewer@aicpa-cima.com.