Partner Jamie E. Hanley and Associate Lisa Strejlau examine how the shift toward virtual-only annual general meetings (AGMs) could affect shareholder participation and board accountability in their Responsible Investor article, “Are Virtual AGMs Weakening Shareholder Rights?”
As UK-listed companies consider moving toward virtual-only AGMs, Jamie and Lisa assess whether online attendance translates into a meaningful shareholder voice. While virtual meetings can remove geographical barriers, reduce travel costs, and expand access, effective participation depends on shareholders’ ability to question directors directly, challenge explanations, and pursue unsatisfactory answers. These opportunities “are part of the accountability shareholders should expect from those entrusted with their capital,” they write.
The handling of shareholder questions is a critical test of meaningful engagement. Jamie and Lisa emphasize the importance of real-time questions and answers, transparent selection and moderation procedures, and publication of submitted questions, including those left unanswered, subject to appropriate privacy protections. Shareholders must also be able to ask follow-up questions. “Without the opportunity to probe incomplete or evasive answers, engagement risks becoming a sequence of prepared statements,” they caution.
The authors recognize that well-designed virtual AGMs can support effective scrutiny, but procedural safeguards alone do not establish accountability. Investors should assess whether difficult questions are addressed, follow-ups are permitted, shareholders can hear one another’s concerns, and unanswered questions are addressed after the meeting. They also warn that company control over the platform and meeting procedures can narrow the scope of debate: “Shareholder scrutiny should not depend on the discretion of those being scrutinised.”
For pension funds and other institutional investors, AGM participation forms part of a broader stewardship framework encompassing engagement, voting, and escalation. The AGM provides “a public forum in which directors must explain their decisions, including where private engagement has failed.” This public scrutiny allows investors to assess both the board’s responses and the concerns raised by fellow shareholders.
Jamie and Lisa advocate for hybrid AGMs as the preferred model, preserving direct interaction and spontaneous challenge while expanding access for shareholders unable to attend in person. They urge institutional investors to scrutinize participation safeguards before supporting changes to companies’ articles of association and to challenge arrangements that restrict shareholder voice. “The objective should be to give more shareholders a meaningful voice, not simply a screen through which to watch proceedings,” they conclude.