21 July 2015
The size and structure of an organisation will determine how a successful AGM is run
As the main AGM season draws to a close, focus can shift away from predicted controversies, activist shareholders and aggrieved protestors, and on to how to run a successful AGM. This meeting is the most important event in company calendars, providing a forum for shareholders and other stakeholders to interact with the board of directors, trustees and management.
What amounts to a successful AGM varies from one entity to another and according to the environment in which it exists. Various factors such the size of the share or membership register, the constituents of the share register and budget will also affect how the meeting should be run.
A key duty of the company secretary, in both commercial and not-for-profit organisations, is running a successful AGM. The main elements to consider which apply to all companies include technical, logistics, shareholder relations and ‘soft’ elements.
The technical elements are regulations and best practices as required under the Companies Act 2006. These include serving notice, the proxy process, election of directors and their attendance at the meeting, and ensuring there is a quorum. Drafting of the chairman’s script with key technical details, including an adjournment proceeding if need be, is also essential.
Logistics includes timing and duration of the AGM, understanding the constituents of the share registers and choosing an appropriate venue for convening. It can also include organising refreshments and souvenirs for shareholders; arranging security depending on the type of attendees expected and liaising with the local police to ensure public order; securing an alternative venue; and transportation to the event.
Shareholder relations involves tracking key and recurring shareholder issues during the year and ensuring the chairman and the board are briefed well on issues.
The soft elements include setting the theme and tone for the event, as well as its promotion.
The theme could range from a corporate anniversary through charity and history to social responsibility; the tone will be determined by the choice of venue and refreshments; and it may be promoted through shareholder coupons and discounts, and advertising.
Barclays Bank Plc’s AGM is a large and complex affair, as would be expected of a FTSE 100 with a very large share register and relatively large retail shareholder base. Clare Barrett, who heads shareholder relations and leads the AGM project at Barclays, explains that setting the right tone and a theme that matches the social, economic and business environment of Barclays is very important. Successfully delivering this soft element is crucial to the AGM’s success. To this end, there is an AGM planning committee chaired by the company secretary with representatives from various departments to ensure the process is mindful of internal and external events and environment of the company.
Clare explains that post-AGM feedback is also important and every two years a simple questionnaire is sent to shareholders to garner their views. In 2015, Barclays’ AGM held at the Royal Festival Hall centred on its historical contribution to SMEs and promotion of innovation with presentations and displays.
Skyepharma plc, a FTSE small-cap SME at the opposite end of the scale from Barclays has a small and simple AGM that reflects it size and share register as a fast growing company. Assistant Company Secretary Clare Carpenter organises the AGM and explains that regardless of size of a listed company, the technical and shareholder relations elements remain largely the same as for FTSE listed companies. For Skyepharma a successful AGM has a quorum, which provides for as many eventualities as possible. These eventualities require monitoring of shareholder interests and opinions, media coverage and keeping an eye out for any developments.
For 2015, Skyepharma’s AGM was successfully held at the premises of one of its corporate advisers which meant that all business was transacted successfully and efficiently within the timeframe provided.
The Architectural Association is an educational charity with more than 4,000 members, most of whom are based internationally. Company Secretary, Kathleen Formosa, explains that not all charities need to have an AGM but the Architectural Association has chosen to do so because of the size of its membership. She also feels it provides an excellent forum for promoting governance and demonstrating the solvency and efficient management of the association’s assets. Members who attend can also express opinions and challenge policies and priorities.
The international membership of the association results in a relatively low turnout. Therefore the AGM correspondence is a key means of conveying up-to-date information. Kathleen notes that the notice, financial statements and accompanying papers provide more detail than is usual in similar organisations. The notice may also include planned changes to policies and the structure or management of the organisation. Membership correspondence is also particularly important in gauging opinions. Thus in 2015, the AGM was a low-key affair held in their own offices with feedback provided to members by correspondence.
Apart from the technical elements, organisations may lend differing weight to the logistical, shareholder or member relations and soft elements of running an AGM. The following points contribute to running a successful event:
The running of a successful AGM regardless of the size or sector requires effective project management skills and leadership skills to ensure it reflects the current state and potential of the organisation.
Mimi Ajibadé is Principal Consultant at Corporate Governance Consultancy AFC Consultancy