Giles Rafferty, Corporate Communications
Annual General Meetings (AGMs) have to happen, it’s the law. Consequently, the AGM is a regular fixture in a listed company’s financial calendar when the Board can be sure stakeholders are looking their way. This also makes the AGM a valuable communication moment.
There are, of course, a number of necessary items of business that must be discharged at the AGM, such as the receipt and consideration of the annual accounts; the election of directors and voting on the remuneration report. Information sharing, however, should also be considered a key goal.
The AGM is a forum where directors account for the decisions they have made on behalf of the shareholders whose interests they are charged with protecting. It is the one time of the year when the Company must present a full financial report, accounting for the use of funds and implementation of strategy, signed off by a Director and the Company’s Auditor. More importantly the AGM provides shareholders with the opportunity to discuss its contents and ask questions directly of the directors that they elect to represent them.
This information sharing serves both shareholders’ and Director’s interests. The shareholders get visibility on who is responsible for the governance of their company and the opportunity to observe the behavior of their Directors, in person. The Directors get unfiltered insights into the concerns of shareholders.
Taking advantage of the opportunity to advance a company’s investment case at the AGM does not have to be the sole preserve of the big end of town, where there are big budgets and big numbers of shareholders in attendance to justify them. Every listed company should look to leverage their AGM to make sure the widest number of investors leave the Meeting feeling that they understand more about their investment and its prospects than they did before.
That doesn’t have to mean going all ‘Hollywood’! The requirement for continuous and immediate disclosure of market sensitive material does mean the AGM is unlikely to be the forum for the breaking of ‘new’ news. There is however a convention of having the Chairman or CEO provide some commentary on trading to date and the outlook for the current financial year and beyond. A simple step to add more to the communication mix could be a deeper dive into a specific element of the Company’s operations or its strategy to help investors appreciate the value added.
Other options for adding additional, compelling and cost effective content to the AGM can include the use of explanatory infographics to illuminate critical but complex aspects of a company’s investment story or video content to help explain and bring alive the investment case. With a little joined up thinking, it would be easy to find additional uses for such content on corporate websites or as investor collateral to ensure the return on investment in better content adds up.
The relevance of the AGM can be given greater currency by setting up a conference call facility to allow remote investors take part and ask questions. Alternatively, a live and on demand audio webcast of an AGM is an easy and cost effective way to get some key messages out to a geographically diverse investor base, when and where it suits them.
If there is the appetite at C-suite or Board level, an IRO may consider a video webcast. Advances in video streaming technology allow for effective video steaming to a standard smartphone with a 4G connection. Webcasts can also include easy to use interactivity plugs-ins to let a virtual participant take part in live Q&A sessions and even vote on AGM resolutions.
At first glance, a listed small cap company, whose experience is that only a few hardy souls attend their AGM, could view the extra effort and expense as folly. However it is worth bearing in mind that the collateral used at an AGM, i.e. the presentation deck, which can include embedded video links, and the Chairman and CEO’s addresses are lodged on ASX’s Company Announcements Platform and are therefore available to all investors. Recordings of conference calls or on-demand webcasts can live on a company’s IR site and are a much more engaging record of the meeting as well as being useful reference points for investors around key financial calendar moments or announcements.
A lot of management time and effort goes into hosting any AGM, so we would suggest that companies and shareholders get some lasting value from the opportunity it provides rather than viewing it simply as an exercise in compliance.