Governance in focus: When the AGM is everything but personal

In the United States, many states are beginning to allow 'virtual' meetings and British companies hope that they could offer similar summits online.

Companies are looking for ways to fulfil their legal obligations to hold an annual general meeting without the problems arising from attracting vocal, even potentially violent, protests.

In the United States, many states are beginning to allow “virtual” meetings and British companies hope that they could offer similar summits online, although none have yet taken the plunge.

“You could argue that online meetings would be more, not less, accessible,” says Catherine May, who has held the roles of corporate affairs director at Centrica and the brewer SAB Miller in recent years.

Voting could be done electronically or by phone.

Important analyst meetings and press conferences are already held online and via conference calls and the system works reasonably well.

In the US, companies have been holding hybrid AGMs, where some participate in person and others attend virtually. Now the technology company Hewlett Packard has ditched its formal annual meeting in favour of a virtual one. The company took the step last year, after its chief executive Meg Whitman had been involved in a heated exchange regarding diversity in the workplace with the Reverend Jesse Jackson at HP’s annual meeting in the Santa Clara Convention Center.

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According to the virtual meeting service Broadridge Financial Solutions, the popularity of virtual meetings has been soaring in the US. In 2009, Broadridge hosted one virtual meeting and three hybrid meetings. By 2015 it was holding 90 virtual-only meetings and 44 hybrids.

The Canadian yoga wear company Lululemon held an online-only meeting this year, which irritated some of its shareholders, including its founder Chip Wilson. He asked for permission to address the webcast meeting at the start of June, but the company refused.

SeaWorld Entertainment, which fears animal rights protests, also holds online-only meetings.

The consumer goods company Procter & Gamble changed its bylaws in 2010 to allow such meetings, but backtracked after objections from shareholders, including two descendants of a company founder.

However, some of the biggest investors in the US are not convinced by the trend and believe that it is an attempt to further marginalise shareholders. Calpers, a large California public pension fund, is among investors who have argued against virtual-only meetings.

business@thenational.ae

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