The Debate: Should AGMs have to be in person?
New rules could allow companies to hold their annual general meetings (AGMs) entirely online, which not everyone is happy about. We hear the case for and against ditching in-person meetings in today’s Debate
YES: An online setting makes it far easier for boards to suppress difficult questions
The AGM is the one time each year that boards of major companies can be publicly questioned and held to account for how they run their businesses, on matters ranging from the financial performance of their company to the impact it has on our environment through dangerous global heating.
The economic, social and environmental impact of these companies is vast. They shape our lives as workers, customers, investors and citizens. So it’s vitally important that they are subject to proper scrutiny.
Unfortunately, online-only AGMs would be a massive setback for corporate accountability. It is not hard to imagine how an online setting makes it far easier for boards to suppress difficult questions or discussion topics, avoid informal interactions with shareholders and escape the kind of critical sentiment that can only emerge in a face-to-face setting.
There are already multiple case studies of companies using online-only AGMs to ‘stage manage’ the agenda and limit scrutiny and challenge – including shareholder questions being mis-phrased by meeting chairs, cut off before the time limit or even ignored altogether. And academic evidence confirms that firms are exploiting the online-only format to avoid criticism on a systematic basis. Research for the European Corporate Governance Institute analysing 2,500 AGMs found that online-only meetings are deliberately deployed by companies to limit shareholder participation.
This will make it harder to hold companies to account over their environmental impact or the effect they have on public health. But it also matters for the returns they generate and for the wider UK economy – decisions that are subject to weaker scrutiny are likely to be worse decisions, leading to weaker business performance and ultimately reducing prosperity and living standards.
Luke Hildyard is head of UK policy at Share Action
NO: I’ve been to annual meetings where tumbleweed blew through
I’ve been to some vibrant AGMs. In January, more than 250 investors came to Guildhall for the annual meeting of Finsbury Growth & Income, the investment trust on whose board I sit. It was our biggest attendance in at least 20 years and a great moment to mark the company’s centenary as well as engage with shareholders. Yet I’ve also been to some meetings where tumbleweed blew through.
And this is the point. Not all companies are the same and they deserve the flexibility to decide how they operate, including on the choice to hold a fully remote AGM format if they wish. This debate is often reduced to democracy versus digital convenience. Yet a survey of Quoted Companies Alliance members last year highlighted more subtleties.
Many directors thought that switching to virtual or hybrid formats would not save them money. Many saw the continued value of in-person meetings, for simplicity but also because smallcaps often have a high proportion of retail investors on their register that have been cultivated over time. And many already use digital platforms to tell their story, offering access which investors large and small lap up.
Companies need clarity on whether Section 311 of the Companies Act 2006 requires an AGM to be held in a physical location. And then, we have suggested to government officials that companies eager to go virtual should get regular approval from their investors to do so. In Germany, companies seek authorisation at least every five years which we think is a good model. There is no point in doing anything unless companies take their investors with them.
James Ashton is CEO of the Quoted Companies Alliance
THE VERDICT
As part of a consultation to reform company reporting regulations, the department for business has put forward a proposal to allow annual general meetings (AGMs) to be conducted virtually. Electronic participation for hybrid-format AGMs has been allowed since 2006; however, whether an annual meeting can be held virtually in its entirety has become a matter of legal ambiguity, with the current rules requiring companies to notify shareholders of the date, time and – crucially – “place” of their meeting.
Resolving this ambiguity is certainly necessary, but there are credible objections to losing the in-person format altogether. As Mr Hildyard argues, in-person meetings form better arenas for proper scrutiny; it is far easier to cut a Zoom feed than it is to physically throw an upset shareholder out of a room. But this is a rather cynical argument, and in the year of our Lord 2026, it seems far more prudent to figure out ways to weed out foul play from digital AGMs than to outlaw them altogether. The verdict: it’s time to get with the times.