2020 was defined by the frenetic scramble to move online, as organizations looked to safeguard business continuity amidst an unprecedented pandemic that shook the business world to its core. As a result, everything that could move online did go online, including annual meetings, where organisations switched their traditional in-person annual meetings to a hybrid (a mix of in-person) or virtual (online-only) AGMs.
As of April 22nd 2020, an estimated 2,240 annual meetings around the world were planned to be online-only. For context, in 2019, only 286 meetings were held online. . However, numbers being released from many Registrars and Transfer Agents, as well as our own data, show that this number is considerably higher. By the end of that year, Lumi conducted over 3,000 virtual and hybrid meetings, and we saw a real shift in perception towards the idea of digital meetings: in a survey undertaken by Lumi, 61% of investor relations professionals anticipated that their 2021 meetings will contain a virtual element, with an additional 11% of respondents believing that their meeting would be entirely virtual. As we begin the 2021 AGM season in earnest, those 2020 predictions have been borne out in the plans of many FTSE companies, as they prepare for another hybrid or virtual meeting this year.
It certainly seems the case that whilst lockdown may have instigated a change, organisations have realised that virtual AGMs are not just a short term solution – there are benefits to be had, even as restrictions ease in Spring this year. Higher attendance numbers, a greater representation across the shareholder or member base, better engagement, lower costs, positive environmental benefits and less time consuming are all reasons that our clients have cited as why they will continue with virtual meetings in the future.
Those that have made the switch already know the value to their organisation of a hybrid or virtual AGM, but one of the most common questions we are asked is how much does a hybrid or virtual AGM actually cost?
There are several factors that can affect the cost of adding a virtual element to your annual meeting or going entirely digital.
- The size of your shareholder register or member base is an initial starting point, whether you are holding an in-room AGM, a hybrid meeting or a virtual AGM. The size of your stakeholder base impacts the cost of your AGM due to the technical aspect of authenticating a larger membership base, the complexities associated with a larger Q&A and the moderation that scale entails
- Are you having an in-room component alongside your virtual meeting – the “new” hybrid? An entirely virtual annual meeting will negate the need for venue hire, for transportation costs for your board members and staff, for refreshments etc. which could actually reduce your overall costs
- Will your meeting be streamed live as a webcast so that your shareholders/members can watch the AGM, or as an audio stream only? Whilst an audio cast will be a lower cost, many organisations choose to have the AGM streamed live to make the audience feel part of the meeting. This can be particularly helpful if you are having discussions around key topics or resolutions that you will then ask your members or shareholders to vote on. As with anything, there are different levels of cost dependent on the level of production. A single fixed camera will be a lower cost than a high production set, for example.
- Will you be asking your shareholders or members to vote at your meeting? And would you like to open the voting window before your meeting, to allow as many votes to be cast as possible? How complex are your voting requirements? The answers to these questions will help to determine the overall cost of your meeting.
This picture of the UAE Football Federation’s virtual AGM gives you an idea of the new post-COVID reality for annual meetings. It’s unlikely that large, fully in-person AGMs will return by the end of this year, and it’s much more likely that the new hybrid model of a virtual meeting with a small in-room component will become the norm.
Lumi is the trusted partner of over 3,000 organizations in 40 countries worldwide. If you are considering a virtual or new-hybrid AGM later this year, or for 2021, please do get in touch.