A campaign group has expressed concern over a petition, led by M&S chair Archie Norman (pictured), pushing for legal changes that would permit virtual-only AGMs and questioned why the company has discouraged in-person attendance at its annual gathering this week.
The Engagement Appeal (TEA), created to promote more inclusive investor engagement, has written a letter to Norman, questioning M&S advice to shareholders to stay away from the AGM venue on 4 July and to participate “digitally”. M&S has told shareholders who do attend that they will be “provided with assistance” to watch online.
In a blog on its website, TEA’s co-founder, Sheryl Cuisia, challenges the Share Your Voice campaign run by Norman over its call for reforms of company law that would smooth the way for more digital contact between boards and investors. Norman calls for the provision of email addresses to be a “pre-requisite of purchasing equity” and for the law to allow digital-only AGMs. There is also a demand for reforming the relationship between companies and “nominees” to make share ownership more transparent.
Cuisia argues that a number of shareholder organisations—among them the International Corporate Governance Network (ICGN), the Pensions and Lifetime Savings Association (PLSA) and the proxy advisors Glass Lewis and ISS—have all called for “hybrid” AGMs, meetings that take place simultaneously online and in person.
She argues that digital-only AGMs would “restrict shareholders’ ability to engage with company directors” and challenges M&S to explain how it “consulted with shareholders” over arrangements for the coming AGM.
Cuisia also questions the need for more reform of the Companies Act 2006, arguing that it already allows companies to identify their shareholders. She says extractives company BlackRock World Mining has recently gone through this exercise.
She told Board Agenda: “As an engaged private investor, a member of the public, and a stakeholder in M&S, I have taken the time to scrutinise proposals and ask questions, and that is what I am doing here with the details of the Share Your Voice petition.”
Cuisia said the Share Your Voice campaign left her with “many questions on whether the terms proposed will indeed lead to greater democracy for retail shareholders”.
The Share Your Voice campaign to reform business law was launched, in April this year, with a claim from Norman that company law was “stuck in a 40-year-old time warp” since an effort in the 1980s, under Margaret Thatcher, to “promote popular participation in capitalism”.
Norman’s claim is that the use of “nominee” intermediaries between stockholders and boards means companies no longer have visibility of their shareholders. He asserts that investor engagement has long been left behind by banking and the energy sector, where digital-only statements and communication are now in widespread use.
In addition to shareholder emails and digital-only AGMs, Norman seeks the end of mandatory hard-copy annual reports and the start of a new relationship between nominees and companies to reveal who shareholders are.
A letter from Norman, reported in the Daily Mail, argues investors would “benefit from more democratic engagement, with more informed, regular communication, reduced time and travel requirements and fundamentally a more level playing field regardless of where they live, what they did and level of confidence in public speaking”.
ICGN is among the organisations cited by Cuisia as supporting “hybrid” meetings instead of digital-only. Kerrie Waring, chief executive of ICGN, writes in a piece for Board Agenda, that it is “optimal AGM format” and virtual-only meetings should be only an emergency measure.
“AGMs are an opportunity for constructive dialogue between corporate boards, management, and shareholders,” Waring says. “While virtual-only AGMs may enable business to be carried out, they cannot fulfil this function as effectively and inclusively as a hybrid meeting, which maximises participation in the interests of all parties.”
Board Agenda has contacted Marks & Spencer for comment.
*Board Agenda is a supporting partner of The Engagement Appeal.