Sausage roll strategies and the importance of fronting up

The annual shareholder meeting – formerly the AGM (annual general meeting) – has always been the most carefully scripted event on a company’s calendar.

As a former PR fixer, I’ve been involved in my fair share of them.

I recall one company advising they’d chosen a local theatre for their annual meeting because “the seats are bolted down”.

And another company where Board directors cringed as shareholders slow hand-clapped the chairman’s speech and shouted down any attempts to answer questions. That meeting set some-thing of a record, ticking over to a second day.

With another company, there was much debate over how we would manage the optics of share-holders tottering out of a local liquor company’s annual meeting with free samples clinking in their carrier bags. Shareholders expected these freebies – and a convivial drink with their post meeting refreshments. But it didn’t always amount to a good look as they emerged to get the bus home. Vouchers were duly provided in place of six-packs but not without complaint.

Catering was always of paramount concern. At the risk of giving away tradecraft, we perfected “the sausage roll strategy”. In essence, this required precision timing on when said sausage rolls would be removed from the ovens. The rationale was that as time wore on, the irresistible aroma of sausage rolls wafting from the foyer would prompt hungry shareholders to wind things up. It worked every time.

In recent times, attendance numbers for annual shareholder meetings has declined. The pandemic understandably kept shareholders away and whether attendance numbers will return to pre-pandemic levels remains to be seen.

We’ve also seen a noticeable change in the conduct of our listed companies. Company Boards are highly attuned to the sentiments of the market, and their shareholders. Apart from a few notable exceptions, we’ve not had the same controversies, bitter proxy battles and sources of shareholder outrage of the past.

As a director of the New Zealand Shareholders Association, I know that many companies are keen to discuss proposals with us and genuinely weigh the views of shareholders. That’s measurable progress for sure.

All this has sparked the question: is the Annual Shareholder Meeting still relevant? Do companies still need to plan for this bit of theatre every year?

In canvassing our members, we got a resounding “yes” to both questions. It’s the same story in Australia.

Many shareholders want companies to also live-stream their annual meetings so they can participate remotely. But this is in addition to the annual meeting format, not a substitute.

There’s no doubt the annual shareholder meeting involves a lot of work and expense but it’s normally the only time that a company faces its owners. While institutional shareholders enjoy the benefit of regular analyst briefings, smaller retail shareholders don’t get this opportunity. Of course, the slide decks and Q&As are usually posted on the website afterwards for all to see, but there’s no opportunity for retail shareholders to ask their own questions.

More importantly, it’s often the only opportunity company directors get to meet with retail investors and hear, first-hand and unfiltered, their concerns. That can be uncomfortable, but it’s actually a gift for any company director. Let’s face it, company directors tend to be chosen from a pretty small pool. The echo chamber risk is very real for them.

While we’ve had a good run of corporate behaviour recently, we know some companies are facing existential threat. The importance of genuine shareholder democracy and consultation is vital to ensure that companies don’t screw the scrum for small shareholders. Once you trade away the right to an annual shareholder meeting, you might never get it back.

So just as we encourage companies to continue holding annual shareholder meetings, we also urge our members – New Zealand investors – to turn up.

It’s an important shareholder right and we will only have ourselves to blame if we lose it.

Louise Nicholson

Louise is a current NZSA Director and PR professional. Her most recent role was at the FMA as the Director – External Communications & Investor Capability.

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