Global trends gravitate towards interactive solutions in various spheres of the corporate world. With mobile apps for investors, video-conferencing for business partners and virtual board management tools for directors, is there potential for digital AGMs to become popular as well?
A virtual/digital/electronic Annual General Meeting of shareholders could be defined as an AGM with the same structure as a physical meeting but involving a combination of tele-conferencing, electronic voting apps and webinars. Such digitalised approach does not seem to be universally recognised in the UK, with only one company having committed to virtual AGMs so far.
Jimmy Choo's example
Jimmy Choo plc, a luxury clothing accessories brand, pioneered the use of digital AGMs in the UK. The company's first electronic AGM took place in 2016, and was followed by another one in 2017. The meetings were held through a conference call and involved shareholders using a mobile application connected directly to the AGM registration system. The app allowed shareholders to submit questions and vote on the resolutions put to the meeting.
Since the shareholders do not need to attend the AGM in person, their participation is more likely. The meeting is thus opened to a larger and remote audience, which in turn facilitates better communication, stronger engagement and more active ownership.
The overall cost is reduced for both the investors attending the AGM (no travel and accommodation costs, etc.), and for the company organising it (e.g. no need for venue hire). Consequently, significant organisational resources are saved for both parties.
What is more, adopting a digital formula for a meeting the size of an AGM can be considered environmentally and socially responsible due to a reduced carbon footprint.
Technical aspects of arranging an electronic AGM are of high importance, since the company needs to maintain an operating system necessary to facilitate the meeting and ensure ongoing technical support for the shareholders' apps. Different levels of access to a virtual meeting need to be properly managed, and advanced security checks are required to limit the participation to genuine shareholders.
On another note, the concept of a virtual AGM – ground-breaking as it is – may simply not gain enough popularity among shareholders to make the whole idea worth pursuing. Well-established companies with entrenched shareholder base may well prefer their AGMs to be arranged in a traditional fashion.
Finally, removing the face-to-face element of any meeting may increase the potential for miscommunication, therefore companies planning virtual AGMs need to carefully consider their approach to managing the meeting (e.g. Q&A session).
Your company's articles of association may need to be amended in order to provide for all the aspects of a digital AGM. Despite the meeting being conducted virtually, the usual requirements regarding notice periods, quorum, attendance, documents being on display and voting still apply. Whilst focusing on the innovative form of the AGM, it is essential to ensure continuous compliance with all its formal aspects.
As per one of the recent ICSA survey's findings, only 36% of the respondents considered the current system of the AGM to be still valuable for companies. Could holding a meeting in a virtual form add more value to its traditional formula? Will more companies adopt digital AGMs in the future? Only time will tell.
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