A new era of shareholder democracy

We have witnessed significant progress in shareholder democracy over the past two years, primarily fuelled by the adoption of technology that continues to reshape the AGM meeting landscape. As a result, a larger number of stakeholders than ever before can attend and actively participate in annual general meetings (AGMs).

As the ease of access to meetings for stakeholders improves, it’s important to look back on how this has changed over the past two years – and consider what still needs to be done.

Embracing digital

The pandemic acted as a catalyst for change in the meeting landscape in the UK. Laws requiring AGMs to be held in physical locations were temporarily lifted globally and companies had to depart from their traditional modes of in-person engagement and voting - and host meetings online.

Although these regulations have been reintroduced, challenges remain regarding the regulated use of virtual technology in the UK. The law is unclear on whether a 'URL' can be considered a viable meeting place and whether voting by proxy is an impartial system.

However, this uncertainty, coupled with the success of virtual meetings, has led to hybrid meetings becoming the norm, not only in the UK but also globally. We are witnessing a growing number of businesses adapting to hybrid meetings and reaping the benefits from them in improved engagement attendance.

The present pace of progress

We have seen more progress in shareholder democracy over the past year, with companies such as Etoro, Blackrock, and Freetrade opening voting access to retail investors. Greater shareholder accessibility invites a larger pool of retail investors, which is beneficial for companies and shareholders alike.

Issues related to shareholder voting and access to AGMs have been a driving force behind our Shareholder Roadblocks campaign, especially in terms of DIY investor access. Our research showed just under half (48%) of UK retail shareholders are unable to attend AGMs because they purchased shares through a broker, despite 92% of them wanting to attend. It’s encouraging the see the industry is listening and making steps to allow voting.

The future forecast

Today, we see M&S paving the way for even greater shareholder democracy with their Share Your Voice campaign, advocating for nominee shareholder access to AGMs. Lumi has been campaigning alongside them since last year and is involved in the latest development of M&S’ campaign, launching a pilot project with Interactive Investor, Broadridge, and Equiniti to connect thousands of retail shareholders to the companies they invest in.

To truly see momentum, we need widespread change across the industry that ensures investors are always at the forefront. We look ahead to a future that fulfils the freedom of access and transparency to information within the democratization of shareholder relations.

As shareholders use their collective voice, they are changing the state of investment criteria. Organizations should keep in mind accountability not only for their performance but also for the formats in which they engage in productive conversations with shareholders to leverage long-term success.