AGM season is here: Three common AGM mistakes and how to avoid them

Australia is in the midst of its annual general meeting (AGM) season. It is at these meetings that shareholders of listed companies have the opportunity to hold the board to account, ask questions and help shape the future of the companies. Clearly, they are significant meetings – and have the power to keep boards and executives up at night in the days and weeks prior.

A well-run AGM can set the tone for a positive year. However a bad one can disengage and disenfranchise shareholders, and has the potential to make headlines for the wrong reasons.

What are the mistakes and how can they be avoided?

A great deal of planning goes into the execution of an AGM. While many firms focus on ‘what do we want to do well’, it is just as effective to consider the question: ‘what mistakes do we want to avoid’. Here are three common mistakes at AGM’s and how to avoid them.

Do not: Sideline shareholders by not giving them a platform

The biggest trend in Australian Annual General Meeting’s in recent years is not what is discussed, but how they are delivered. Prior Covid-19, The Corporations Act ruled that AGMs were to be held in a physical location. However, to adhere to social distancing restrictions, the act was amended in 2020 to allow AGMs to be held virtually or in a hybrid fashion.

In-person meetings had one significant drawback – they limited attendance to only those living close by, or those comfortable enough to attend. The result? A lack of diversity in the voices being heard, and limited participation and engagement. Firms must avoid returning entirely to in-person meetings as they sideline shareholder participation and engagement.

A hybrid event blends the benefits of in-person attendance and virtual participation. Lumi data shows that virtual and hybrid meetings help to increase attendance and participation because more shareholders can participate – irrespective of where they live or their comfort level.

In fact, hybrid meetings drove  attendance to almost double and engagement to increase by 25% from 2021 to 2022. There are still many benefits of having people attend in-person, but those benefits are magnified when another cohort can join virtually too. Greater attendance, more perspectives and increased accountability are essential – and hybrid AGMs provide that.

Do not: Make it difficult for shareholders to access secure virtual AGMs

Deciding to host a hybrid AGM is one thing, but doing so efficiently is another thing entirely. Not all attendees will be tech savvy, so firms must avoid the mistake of over-complicating the process. Where possible, businesses should opt for a meeting with a single point of entry – for example a URL shared in all pre-AGM emails/correspondence – that is straightforward.

Accessibility for all attendees must be a priority, and factored into every stage of the process from day one to post-AGM activity. Likewise, the security of an AGM is essential. With the sensitive nature of these discussions, firms need to ensure the robustness and accuracy of voting and participation from shareholders. Cyber breaches across all cfirms are increasing in both severity and regularity today, and no company, meeting or event is entirely immune.

Even the biggest, wealthiest and best-resourced firms can have cyber breaches. So, when selecting a virtual or hybrid meeting software, companies should seek solutions that have been approved, penetration tested by third parties and are run from an encrypted network.

This reduces the risk of a cyber security issue arising with your meeting – something that is particularly top of mind today. Companies should avoid making it difficult for shareholders to access the AGM and easy for potential hackers to compromise it. Preparation is key.

Do not: Be unprepared with technology

Technology has improved and streamlined so many processes, businesses and industries – but tech ‘issues’ do still occur. Often, at the most inconvenient times. Companies must not make the mistake of being unprepared. While it is unrealistic – and probably impossible – to prevent them entirely, there are many ways to reduce their likelihood and severity.

If a firm has to make an SOS call to an external IT technician during an AGM, it is already too late  even if they can assist. Tech resilience planning is an essential component of any AGM.

With a Lumi meeting, companies have access to a highly-experienced, on-demand technician to assist before, during and after the meeting to troubleshoot any unexpected issues. Also, having an IT team on hand to help with any on-site hardware issues, alongside a delegated ‘second’ to take over in case a Chair has connectivity issues is also recommended. If they are not needed, great, but the peace of mind that they are there is worth its weight in gold.

By preparing in advance, companies can feel all the benefits of a technology-driven AGM safe in the knowledge that they  have the best technology and the best technicians on hand.

AGM season is upon us, and many firms are diligently planning ahead of what they hope will be an engaged, productive and convenient meeting. By avoiding a few mistakes, companies can facilitate an AGM that exceeds their expectations, and those of their shareholders too.

Oliver Bampfield is the Managing Director ANZ at Lumi Global.