Private shareholders often feel frustrated at annual general meetings (AGMs) of publicly listed companies because they know that their votes won’t have much impact. Institutional shareholders, with their dominant stakes, ultimately determine the outcome of the meetings. Despite this, is it still worth participating in the voting process and attending AGMs?

Institutions typically vote in advance, giving company secretaries peace of mind that resolutions will be carried. Fund managers of institutions, such as investment trusts, Oeics, hedge funds, and foundations, hold the power in these situations. The relatively small shareholdings of private investors may seem insignificant in comparison.

The debate over how many shares private investors actually own has been ongoing. Most shares, including those in individual savings accounts (Isas), are held in nominee accounts by institutions or platform providers, making it difficult to track true ownership. Private shareholder organizations have been urging platform providers to inform their clients about upcoming AGMs and facilitate voting. While individual private investors may hold small stakes, collectively they can rival institutional holdings.

Owning shares in one’s own name can help stay informed and involved in the voting process. Attending AGMs provides an opportunity to learn more about the company, observe the directors in action, and potentially influence decision-making through well-researched questions. Interacting with other investors and discussing concerns can also be valuable.

Some companies, like Marks and Spencer (MKS), have shifted towards online AGMs, citing a better experience for shareholders. However, online meetings may limit open discourse and question curation by executives. On the other hand, companies facing apathy from shareholders, like Spectra Systems (SPSY), present an opportunity for small shareholders to make a significant impact. Spectra Systems’ low turnout at AGMs reflects a lack of engagement from shareholders, potentially putting the company at risk if performance falters.

While some companies struggle with shareholder participation, proactive involvement from private investors can shape the future trajectory of a company. AGMs offer a platform for shareholders to voice concerns, interact with management, and ensure accountability. Ultimately, staying informed and actively engaging in the voting process can help protect shareholders’ interests and drive positive change within companies.