From Todays AFR

Geoff Wilson to lead investor army against virtual AGMs

James ThomsonColumnist

Oct 26, 2020 – 1.44pm

..................Companies can screen questions they address and control the length of the debate on resolutions. Mr Wilson said WAM’s experience with virtual AGMs in the past month has left him with concerns.

“We have already experienced having our pre-submitted questions ignored,” he said.

“In a physical GM every shareholder can ask a question. In online AGMs companies are already failing to answer shareholder questions,” Mr Wilson said.

Mr Wilson said large investors, who can get private meetings with boards, already had a huge advantage over small shareholders and virtual AGMs would further entrench that.

“Virtual AGMs tilt the balance of power to the big end of town,” he said. “Retail investors are already disadvantaged compared to institutional investors. This will be another nail in the coffin for them.”

Virtual AGMs are a necessity during the pandemic but they can diminish shareholders' ability to ask questions and hold companies to account.

— Louise Davidson, ACSI chief executive

ACSI chief executive Louise Davidson said this was the wrong time to be changing the way AGMs are held, particularly in the midst of a busy period for meetings when many companies are still learning about the technology.

“Virtual AGMs are a necessity during the pandemic but they can diminish shareholders' ability to ask questions and hold companies to account,” she said.

“In the AGMs we have already seen this year, it is apparent that, like a Zoom birthday party, something is definitely lost in the new format.

“AGMs are a core part of shareholders' ability to hold companies to account. Significant changes to how they are run should not occur without proper scrutiny and consultation.”

Gary Weiss, who has been on both sides of the fence, as a director being asked tough questions and an investor asking them, saysphysical meetings have been part of the corporate scene for decades.

“They provide a great opportunity for shareholders to engage directly with the board – something that is not really possible to capture through virtual meetings,” Mr Weiss said.

“It’s a bit like conducting sessions of parliaments virtually. Something would undoubtedly be missed.”

Sandon Capital managing director **riel Radzyminski said physical AGMs were a key way for investors to ask questions of directors and, where necessary, put pressure on them.

“The mere fact of having to face shareholders in person is a significant accountability tool,” he said.

“The only ones that will benefit from this are shoddy companies. Good companies won’t mind being grilled by their shareholders – it’s the shoddy companies that will.”

Mr Wilson agreed, saying: “Accountability goes out the window from a governance perspective. Companies are free to disallow votes without challenge, push through contentious resolutions without challenge or explanation.

"It gives boards the power to do what they want and leaves shareholders hung out to dry.”