This blog gives you the latest topical news plus some informal comments on them from ShareSoc’s directors and other contributors. These are the personal comments of the authors and not necessarily the considered views of ShareSoc. The writers may hold shares in the companies mentioned. You can add your own comments on the blog posts, but note that ShareSoc reserves the right to remove or edit comments where they are inappropriate or defamatory.

Learning Technologies and Ten Entertainment AGMs

I “attended” the on-line Annual General Meeting of Learning Technologies Group (LTG) today. Full members of ShareSoc can find my report on that meeting here: https://www.sharesoc.org/agm-reports/learning-technologies-agm-report-2020/

Another recent AGM of an AIM company was that of bowling alley operator Ten Entertainment (TEG) for which I hold all of 50 shares. I sold almost all my holding before they had to close all their venues. This was another company that did a placing recently but it is hardly surprising in this case that it was required to keep the business afloat until they can get back into operation.

I don’t think this company even offered virtual attendance at their AGM so only the poll results were subsequently announced. They collected over 20% of votes against both the Remuneration Policy and Remuneration Report and two directors including the Chairman also collected substantial votes Against. The company is to review its remuneration policy which I certainly did not like when I looked at it.

Virtual and Hybrid AGMs, and a solution

I have been discussing with other ShareSoc members how virtual and hybrid AGMs should operate – indeed how AGMs should generally function in future as it is quite possible that virtual or hybrid options may become the norm even after the epidemic has passed. For instance companies such as TEG are changing their articles to permit them in the long term even after the temporary authorisation to permit them has lapsed.

But it is clear that there are good and bad practices while attendance at a physical AGM is still clearly advantageous so it would be a shame if that is excluded in future. For example it gives you the opportunity to have informal discussions with directors before and after the meeting as well as with other shareholders which you can never do at virtual AGMs. It also gives some of us the rare opportunity to get out of our home offices – we are all suffering from cabin fever at present!

One somewhat archaic practice that is likely to disappear is the “show of hands” vote. This was always useful and appreciated by shareholders because it firstly allowed AGMs to be concluded rapidly if there was no significant opposition to resolutions, and secondly it allowed you to easily see the overall opinion of shareholders at the meeting. If there was any doubt of shareholders views, a poll can be called by the Chairman, or by shareholders. A poll often means that the vote outcome is not declared until much later – too late to ask about any opposition. If that tactic is used I always ask the question in the meeting of “were there any significant proxy votes against any of the resolutions” as the proxy votes are known well before the meeting.

But with hybrid meetings (those where a physical meeting is combined with a virtual one), I can see a number of practical difficulties with allowing a show of hands vote (and checking who is voting), so I think that will go the way of the dinosaurs.

I suggest also that presentations to shareholders, and discussion thereon, should preferably be separated out into a previous virtual event – sometime after the Annual report is issued and Notice of the AGM has been issued but before the proxy vote deadline. This would enable shareholders (and others as such as non-shareholders and nominee holders) to become informed before they vote. The formal AGM with voting on a poll could then be held later (as a hybrid meeting).

Does this idea make any sense to readers?

But it is clear that it would help to standardise the actual process for virtual meetings and the software that might be used for them – or at least to those that can support the facilities that are needed.

Roger Lawson (Twitter: https://twitter.com/RogerWLawson  )

10 Comments
  1. Mark Bentley says:

    I strong agree that in current circumstances, when physical AGMs can’t take place, a “virtual” shareholder meeting, at which shareholders can question directors, held a reasonable amount of time before proxy votes have to be submitted is the ideal solution.

    However, once current restrictions are lifted and physical meetings can take place, I would not want presentations to be separated. As you say, a key benefit of a physical AGM is the opportunity to chat informally with the directors and other shareholders, but I and, I imagine, many other shareholders would not want to first attend a virtual meeting and then travel for a formal, brief, meeting. Hence any such formal meeting is likely to be poorly attended. The best solution is to hold a genuinely hybrid meeting, similar to what has been done in parliament, where some shareholders would be physically present and others, for whom travel may be inconvenient, can attend remotely. This still leaves the issue of voting at the meeting – but it should not be beyond the wit of man to devise a technological solution to that.

    You comment in your report on the LTG AGM that only registered shareholders were able to attend their virtual AGM because a shareholder code was required. This is truly unacceptable as it further disenfranchises shareholders with shares in nominee accounts. Obtaining a personal CREST account has now become almost impossible (except at vast expense), so that excludes almost all retail investors. Other companies have made arrangements for nominees to be issued with codes that beneficial shareholders can use. Shareholders should complain vociferously to any company that has not made arrangements for non-registered shareholders to attend.

  2. Mark Guthrie says:

    Why and how do you get notice of these meetings? I presume I don’t because my shares are held my nominees. Is there an alternative way of holding/buying shares if you use the likes of SmartInvestor, HL or DeGiro?

  3. rogerwlawson says:

    Mark B. I agree with you that having two separate meetings would not be ideal.
    Mark G: If you are on the share register, you get posted a notice. But they are usually also given in RNS announcements – there are several providers of those.

    • Mark Guthrie says:

      Roger, i assume I don’t show on the register? Can these RNS suppliers give you notice on shares you hold if you supply that info? Can you name an RNS agent plse.

      • rogerwlawson says:

        MarkG: you will definitely not appear on the register if are in a nominee account unless you are in a “designated” nominee account which hardly anyone offers. The LSE provides a system to delivery RNS announcements for just the shares you hold – it’s free.

      • Mark Bentley says:

        Hi Mark,

        If your shares are in an account with a typical online broker, like those you mention, then you are not on the shareholder register and there is currently no mechanism for you to be registered. The situation is explained in depth, here: https://www.sharesoc.org/investor-academy/advanced-topics/nominee-accounts/

        One of ShareSoc’s most important campaigns seeks to address this issue. You will find more about this campaign and recent progress with it here: https://www.sharesoc.org/campaigns/shareholder-rights-campaign/ Please join and support the campaign.

        With platform companies, like those you mention, you can only hold shares in a nominee account. The services for obtaining information and voting rights that brokers/platforms offer vary. You can find a comparison of some of the leading platforms here: https://www.sharesoc.org/forums/topic/shareholder-rights/

        We also have good information about where you can view RNSs here: https://www.sharesoc.org/investor-academy/internet-resources/data-sites-tools/news-sites-2/ That article also explains how you can use the London Stock Exchange website to set up “News Alerts” so that you are emailed whenever a company you are interested in releases an RNS. We strongly recommend that you set up alerts for all companies in your portfolio, so you don’t miss out on important information. Note that the LSE have recently changed their website, so it now looks a little different from what I described, but they offer the same functionality. Many companies also offer news alerting from their own websites and those are worth signing up to too.

        Most, but not all, companies issue an RNS notifying when their AGM is to take place. Look at the RNS history, in Investegate, of each of your portfolio companies to see whether they have issued such notices historically. Always download the annual reports that your companies issue from their websites. Sometimes the notice of AGM is contained in the Annual Report. For companies that neither include their AGM notices in their annual report nor issue RNSs notifying meeting dates and arrangements, you will need to visit their website and obtain the information there. Sometimes this is not easy to find. If you cannot find it, I recommend that you contact the company and ask them to show you where you can obtain the notice of AGM.

        Best,
        Mark Bentley

  4. rogerwlawson says:

    P.S. To Mark B: one problem with combining the two meetings into one is that as proxy votes need to be submitted before the meeting, nobody can vote after seeing what the directors have to say if a poll is used which is almost certainly going to be the voting arrangement (i.e. in their presentation or in response to questions from shareholders). This fatally undermines the purpose of an AGM.

    • Mark Bentley says:

      As I mentioned in my comment, Roger, a technological solution is required that permits secure real-time voting to hold genuine hybrid AGMs. As it happens, ShareSoc has just been approached by a software provider who purport to have just such a solution, which has been deployed in South Africa for AGMs of their companies. We are reviewing this solution.

  5. cliffw8 says:

    I quite like the show of hands at meetings as it allows the Chair to quickly see and demonstrate that a motion is supported and passed. Chair will know from the proxies what the proxy vote is, hence, so long as Chair is a good chap/chappess/person, there need be no worries that the motion is being railroaded through. This process enables the meeting to proceed quickly. Meetings which are slow can tend to lose the audience and when it is hybrid online the problem gets worse. In a physical meeting the worst that can happen in a slow boring meeting is some of the member fall asleep.

    I had a long chat with a ShareSoc member who was very concerned about this. We concluded that in a Covid and post-Covid world the ideal AGM should be a hybrid, ie a combination of a physical and an online meeting. The Chair could still ask for the hybrid equivalent of a show of hands. However we concluded it should only be an indicative show of hands, ie non-binding and that a poll would have to be done as well. The indicative show of hands would enable the Chair to see the outcome (strictly speaking the most likely outcome) and then he could review the actual vote after the AGM.

    Simply sticking up one’s hand in a Zoom AGM hybrid would not be adequate. If there are more than 50, it is difficult to see all those on the Zoom. However a simple app/question/JotForm survey, etc would enable the company to see a count of those “attending” the AGM. This does not take account of the number of shares that each member attending the AGM can vote. However the poll will do that (if necessary), so we don’t need to worry about that, further.

    Should all votes be lodged at the AGM in person, or at the agreed time before the AGM? Why should proxies have to be lodged in advance? Why not lodge them after the discussion at the AGM? The votes could then be counted and checked and the exact results could be announced say up to 5 days after the AGM. The indicative vote would be known at the AGM if the modernised version of sticking up ones hand were adopted.

    I liked Guy Jubb’s idea of virtual meeting(s) with companies before the AGM when issues could be raised, questions asked and management could give answers. This seems a great idea to improve engagement and make AGMs more useful and interactive and purposeful. If the AGM looks like it might be a gunfight, then a pre-meeting(s) with Shareholders to discuss the issues sounds extremely sensible.

    This is a bit of an Aunt Sally. Views welcome.

  6. rogerwlawson says:

    In my proposal for two meetings, the first one virtual/hybrid, the second one a vote, the second one would actually not need to be a meeting as such – just a voting process that nobody would need to attend in person. All the Q&A stuff would be done at the first meeting.

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