The debate around whether annual general meetings (AGMs) should be held in person or solely online has been a topic of discussion among directors since the onset of lockdowns. While many AGMs have been held in person with a simultaneous broadcast, some are questioning the necessity of this dual approach. Smaller companies argue that in-person AGMs often result in low shareholder attendance, while larger companies express concerns about the time and effort required for preparation. The Companies Act 2006 does not specifically address virtual-only AGMs, making it necessary for companies to explicitly permit them in their articles of association. However, changing the articles of association to allow for virtual-only AGMs requires a special resolution passed by at least three quarters of shareholder votes, which some view as a cumbersome process.

Legislation is expected to be introduced in the Audit and Governance Bill to give companies the right to hold online-only AGMs, providing a more streamlined approach to conducting these meetings. Some companies, such as AstraZeneca, Rolls-Royce, Haleon, and BAE Systems, have already adopted virtual AGMs effectively, with shareholders encouraged to attend online.

Preparing for large AGMs involves planning for potential disruptions, especially in industries prone to activism. Companies must monitor social media and closely track shareholder holdings to anticipate any disruptions. Climate activists have been known to attend AGMs to voice concerns about companies’ environmental practices and demand accountability.

Engaging with dissenting shareholders and protesters is advised, although conflicting views on issues such as climate change and renewable energy can make finding common ground challenging. Virtual-only AGMs may offer convenience, but face-to-face interactions at in-person meetings can provide valuable insights for company directors. Meeting individual shareholders can offer a different perspective and potentially lead to a deeper understanding of the impact of business decisions on stakeholders.

In conclusion, while virtual-only AGMs may seem like a practical solution, the importance of in-person interactions between company management and shareholders should not be underestimated. Hearing directly from shareholders can provide valuable feedback and insights that can ultimately strengthen businesses. It is crucial for company directors to engage with shareholders in a meaningful way to foster transparency and accountability within the organization.