Has the AGM reached its use-by date?

A recent survey shows 47 per cent of direct investors have never been to an AGM, so should the system be changed?

Findings from the GPS-Melbourne Institute Leading Index of Shareholder Confidence shows 47 per cent of people who directly own shares in ASX-listed companies have never attended an AGM while only 5.3 per cent of retail investors went to an ASX-listed AGM last year.

As such, it is no surprise that 49.9 per cent of retail investors agreed that they would “support a change in which shareholder voting was undertaken separately and companies hold an information-only meeting”.

The managing director of proxy advisory and corporate governance consulting firm GPS, Maria Leftakis, says this means that a radical change is needed to re-engage shareholders. Of course, it could also be interpreted that shareholders are simply happy with the way things are. Whatever the reason, it is clear that proxy voting by mail changed the need for attendance in the 1970s and the advent of online voting has shifted the goal posts again.

Leftakis says: “Already, large corporations in the US are conducting online-only voting in web-based meetings that shareholders can click into, have a say via a chat facility, then vote on each resolution as it’s presented. This is where we think the future of voting is heading.

“But what shareholders are telling us is that they really want quality time with directors to hear more about the future outlook and strategy of the company, as opposed to a retrospective discussion on financials”.

For a full copy of the findings please click here.