A leading corporate governance body has told the EU that companies should offer in-person AGM facilities and resist arguments to allow online-only events.

Jen Sisson, chief executive of the International Corporate Governance Network, has written to the EU, backing “hybrid”—combined online and in-person—AGMs, arguing that anything else could weaken shareholder rights.

“Meeting formats that remove physical attendance or restrict interaction with boards and management risk weakening shareholder rights and reducing the quality of shareholder oversight,” Sisson writes.

She adds: “ICGN believes that virtual-only AGMs should only be used in emergency circumstances.”

Sisson argues that companies who want the option of AGMs online only should seek the backing of a “supermajority” of shareholders.

Sisson writes: “Regardless of the format, key shareholder protection safeguards should be embedded in legislation to ensure that shareholders can exercise rights on an equal basis, including the right to ask questions in real time without undue filtering.”

Legal clarification

Sisson’s intervention comes in response to consultation on the EU Shareholder Rights Directive and comes at a time when the UK is also considering a clarification of the law in relation to AGMs and whether they can be staged exclusively on the internet without the option for shareholders to attend a physical event.

BP recently provoked controversy when it included a resolution at its recent annual meeting which asked shareholders to, among other things, approve online-only AGMs.

Minerva, an adviser to shareholders, wrote in a blog that the decision to “bundle” the measure in with others “reduced transparency”.

AGMs have also been the subject of debate in the House of Lords where speakers argued virtual-only meetings should not be permitted under the review government currently has underway.

Lord Christopher Fox said in a debate that virtual events would hand control to institutional investors.
“That is why individual shareholders should have their day at an AGM,” he said.

Marks & Spencer pushed for an online-only AGM in 2023 but met with so much opposition that it gave up on the drive.

The European Commission began a consultation on the Shareholder Rights Directive in February. Proposals are expected at the end of this year.

A revision of the law would form the third generation directive aimed at addressing increasing demand for digital meetings and improved information flows across borders.