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My Lords, too often directors forget that it is shareholders who own the company. To hold AGMs entirely virtually, barring shareholders’ attendance, is in my view arrogant, unacceptable and sometimes, frankly, cowardly. Institutional shareholders have near-continuous access to boards, but the AGM is normally private shareholders’ only opportunity. It is not just the formal part of the meeting but the opportunity to meet and question directors in the margins of the meeting. Of course, sometimes only a handful of shareholders turn up, and, yes, there is a cost, but we are talking here of the principle of shareholders’ rights. Surely the way forward is hybrid AGMs, with a choice of either virtual or physical attendance.
My Lords, too often directors forget that it is shareholders who own the company. To hold AGMs entirely virtually, barring shareholders’ attendance, is in my view arrogant, unacceptable and sometimes, frankly, cowardly. Institutional shareholders have near-continuous access to boards, but the AGM is normally private shareholders’ only opportunity. It is not just the formal part of the meeting but the opportunity to meet and question directors in the margins of the meeting. Of course, sometimes only a handful of shareholders turn up, and, yes, there is a cost, but we are talking here of the principle of shareholders’ rights. Surely the way forward is hybrid AGMs, with a choice of either virtual or physical attendance.
The Government are not mandating virtual AGMs and there will be nothing to stop companies holding hybrid AGMs. As the people best placed to make decisions about their businesses, we are giving companies and shareholders the legal certainty to undertake fully virtual AGMs if it is right for them. Many investor groups in favour of hybrid AGMs support fully virtual AGMs in extraordinary circumstances. This legal clarity will provide companies the certainty they need in those situations.
To ask His Majesty’s Government what assessment they have made of the effect of companies holding their annual general meetings solely online on individual shareholders’ ability to hold directors to account.
To ask His Majesty’s Government what assessment they have made of the effect of companies holding their annual general meetings solely online on individual shareholders’ ability to hold directors to account.
My Lords, the Government announced on 20 January that fully virtual annual general meetings would be included in the upcoming consultation on modernising corporate reporting. Officials are engaging with investors and businesses on the practicalities of this. We will ensure that fully virtual meetings take place only where shareholders agree and that any change is accompanied by appropriate shareholder safeguards, co-created with investors and business. A full assessment will be made following the consultation and engagement period.
To ask His Majesty's Government what assessment they have made of the entitlement of a shareholder to choose whether to attend public company annual general meetings in person or digitally.
To ask His Majesty's Government what assessment they have made of the entitlement of a shareholder to choose whether to attend public company annual general meetings in person or digitally.
It is clear that the use of digital or “virtual” platforms can provide benefits to both companies and shareholders in the context of annual general meetings and indeed “hybrid” meetings, which provide a combination of physical and virtual access, are already relatively commonplace. While the Government committed last Autumn to clarifying the law around wholly virtual general meetings, we fully recognise the importance of shareholder rights. Therefore, the appropriate safeguards will be considered as part of any legislative changes. My officials will continue to develop this policy and work towards a position that balances the interests of all relevant stakeholders.