Last week, I attended my first AGM (virtually, of course). As a shareholder in a company, you’re entitled to attend their Annual General Meetings, held by the board and directors of a company. Within these meetings, you can hear an update on the company’s performance, their strategies and ask questions… plus when they’re not virtual, there’s usually sandwiches.
But besides sandwiches, AGMs are important to attend because it allows you to stay up-to-date on the direction of the company, you can vote on resolutions or policies related to the company or even sometimes vote on the election of board members. I’ve heard fund managers even say that the personal impression that a director or board members might give you can weigh into your decisions to stay invested or to diverge.
The way an AGM is generally conducted is that the host, either the CEO or Chair of the Board, will open with an introduction about the year that’s been. This helps to provide a little context to the operations and give you a general sense of the position of the company. For the meeting I attended, this was then followed by a presentation by the CEO on the financial and general performance of the company.
With the COVID situation affecting most businesses, I was keenly looking for reassurance that their financial situation was stable, they had a strong balance sheet (high growth, low debt, well-adjusted market capitalization) and that they have been able to move swiftly in the transition to e-commerce and the changes needed during COVID. With big changes happening in many industries due to Coronavirus, it’s unlikely that our behaviours as consumers will revert back to our previous ways completely. So, I wanted to know that moving forward, the company was ready and willing to serve clients in a myriad of different ways. I was also pleased to see a Sustainability Framework set out with the confirmation of a Sustainability Report to be delivered to shareholders in future.
Following the performance presentation, the Chair offered a few different policies or changes that were then voted on by shareholders. In the meeting I attended, they re-elected a board member and voted on a renumeration framework to maintain and nurture top talent within their teams, amongst other things.
From my one-time-only impression, it does seem that the general presentations can be quite vague and the great information comes during question time at the end. Questions that were posed in the meeting I attended included topics like: how are they shifting to online? When will they turn a profit? Are they looking to take the company global? This really helped to paint a picture for me of the full view of the company.
So, if you’re invested in a company – even on a small scale – it can be really helpful to attend these meetings to understand what’s occurring and to decide whether you want to stay invested in the company for another year!
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