SGX-listed companies yet to hold a virtual AGM during Covid have a steep learning curve ahead of them - the SGX has made it as easy as possible, but we still find many companies are ill prepared for what's in store.
SGX has granted exemptions which mean companies must notify shareholders of their AGMs at least two, ideally three weeks in advance of the AGM date. They must allow shareholders to pose questions ahead of the AGM, and answer them through SGXNet before the deadline for proxy votes.
All voting must be done by proxy, with the Chairman appointed as everyone's proxy. The results of voting on the resolutions are then presented during the virtual AGM.
However, in our experience companies are unaware of what the virtual part entails. Companies know little about live webcasting. And why should they. Past AGMs have all been held in person. However, as hybrid AGMs become the norm, these tips might help get started.
- Little understanding of the difference between video conferencing platforms and live webcasting. Some companies asked whether they could just use Zoom for their AGM. Well, it's possible. But they need to understand the security implications, the limited branding and interactivity options, and more.
- Shareholders were not sufficiently informed about when and how the AGM would take place. In general, attendances fell short of expectations. Companies need to market their AGMs better, going beyond the traditional notice on SGX Net and a mention on the investor relations page of the website.
- Companies can still take questions. Even if shareholders were given the chance to ask, and answer, secure Q&A chat functionality is still possible. Of course, the answers will come too late to inform shareholders how they might vote, as all voting takes place by proxy in advance. But it certainly makes for a more interactive experience and demonstrates openness and transparency.
- Directors and officers who don't have a speaking role don't need to be present in the studio for the webcast. They can dial in from their home office and show they are present during the "roll-call" as the AGM starts.
- Technology isn't a hindrance. But you can make it easy or difficult for yourself. Companies which came to our studio had a significantly less stressful time than those which insisted we go their office. That's because we have no control over the internet connection, and sometimes corporate firewalls get in the way. Better to come to our studio.
- It's a marketing opportunity. Don't just go through the motions of reading out voting results of resolutions. Ensure the CEO and CFO give their presentation. Talk about the achievements during the year. Add colour to whatever Covid-related disclosures you've already made. We found very few companies took up this opportunity. Some companies invited various intermediaries to watch. As all votes have already been cast and tabulated ahead of the AGM, there is no risk of non-shareholders influencing the outcome.
Overall the regime of hybrid AGMs was an opportunity for listed companies to get away from the AGMs they dread so much, where shareholders come only for the food at great expense to the company. I get the sense that if companies don't change their approach the SGX is unlikely to extend the virtual regime much beyond the Covid-induced lockdown.