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23 May

As the AGM season picks up pace, there are two questions that will be keeping Boards, the Chairman, and the Company Secretary up at night: ‘Which resolutions could be rejected?’ ‘What questions will the Chairman be asked?’

While the former is well-documented and companies work hard to understand what questions may come up it, is not usually possible for them to understand what questions are emerging from AGMs across the market. Shareholder questions are a key part of general meetings and can sometimes be the most contentious part of the AGM. But how actively are shareholders using this opportunity, and which topics are they raising?

For the first time, we present current data on the questions being asked at AGMs across both the Main and AIM markets, getting to the heart of the issues that are important to shareholders. The questions have been categorised into 15 topics which cover the main issues, ranging from ‘traditional’ areas such as financial performance and regulation, through to more topical issues like Brexit and the gender pay gap.

Throughout the season, we will be updating the data below, providing commentary from Link Asset Services’ experts in shareholder engagement and governance. As the UK and Ireland’s largest registrar with a Relationship Management team who provide dedicated support with meeting management, as well as one of the UK’s largest company secretarial teams, Link Asset Services provides expert guidance to companies through their corporate calendar and major shareholder events.

2018 AGM questions*

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Top 10 question topics covered (includes only those AGM at which one or more questions were asked)

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*based on live data captured at 49 AGMs from 24 April -15 May
** ‘Other’ includes all questions that do not fall in the other 15 categories

Company strategy and performance oust expected ‘hot topics’

It is notable that questions on the recent ‘hot’ topics of remuneration, gender pay gap and auditors, represent less than 10% of questions asked. This is perhaps because companies are recognising the importance of these subjects and are often covering these in the presentations to shareholders at the meetings, and therefore ‘heading off questions at the pass’. We see that, nonetheless, shareholders are still focussed on investment returns and the core areas of corporate strategy and financial performance, which makes up nearly half of all questions asked, including those around companies’ recent mergers and acquisitions, capital structure, or specific product and distribution strategies.

“Following a year of big news in both the corporate governance and political area, it is interesting that shareholders’ questions have centred instead on core areas of performance and strategy. It suggests that these turbulent times have prompted shareholders to focus in on the bottom line and question companies’ ability to adapt to these market conditions”, comments Michael Kempe, Chief Operating Officer at Link Market Services.

Environmental concerns creep up the agenda

With many major institutional investors lobbying around environmental, social and governance (ESG) issues, it is perhaps unsurprising that environmental issues is the third most popular question we are seeing during this AGM season. In all of the AGMs we have observed, environmental questions have been raised exclusively at the FTSE 350 companies’ meetings.

Tracey Brady, Managing Director of Company Matters, comments: “Sustainability is increasingly being seen as a Board level issue, and across all sectors, not just for those companies who operate in the most affected industries such as oil or mining. It will be interesting to see whether this starts to filter down into more of the smaller FTSE and AIM-quoted companies, since environmental issues are vital for a company’s strategy and performance, however large or small.”

No questions at 1/3rd of AGMs

At just under 1/3rd of AGMs we have observed so far, there have been no questions asked. In some cases where the company is very small, or has a very limited shareholder base as is often the case with investment trusts, this can be because no independent retail or institutional shareholders are present at the meeting itself. However, this is certainly not always the case.

“For retail shareholders, engaging with companies at the AGM – whether through voting or asking questions – can be a daunting prospect. Companies should consider how they can empower shareholders to engage more actively, whether this is through improved digital mechanisms, or continuous investor programmes”, comments Jai Baker, Head of Industry at Link Market Services.

As the AGM season progresses, follow this page and our LinkedIn page to find out which topics are being raised.

Link Asset Services’ clients who wish to find out more or discuss these results further should contact their Relationship Manager.

Methodology
Link Asset Services has captured data from clients’ AGMs attended by LAS employees, including listed companies for which it provides registrar services. This data is intended to present an overview of trends and does not provide a comprehensive picture of all UK and Irish AGMs and does not constitute investment or voting advice. All client data is confidential and is not being shared with any third parties.

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