We have written to the FRC, again, about AGMs. Our note, written by Peter Parry, also contained some detailed analysis by UKSA member Phil Clarke (below). The email was written before the FRC published its latest guidance note, which is available here https://www.frc.org.uk/getattachment/e3224310-c39c-4b48-b56b-cc703936beeb/Updated-QA-AGMs-Best-Practice-Final.pdf
To Jen Sisson, FRC Chief of Staff and Company-Investor Engagement
I am forwarding an email thread about AGMs initiated by UKSA member Phil Clarke. Much of it is already known to the FRC following Phil’s contact with Sara at FRC Communications. It supports the points raised in the open letter we sent to the FRC, FCA and BEIS on 25th April.
Phil provides useful feedback on his experience of having attended about forty AGMs during lockdown. His colourful management summary suggest that many have been less than satisfactory. His more detailed analysis in his email of 1st June to Sara sets out some suggestions for updates to the current guidance.
I would be grateful if we could arrange a (virtual) meeting at your convenience to talk through the issues raised. In particular:
- many companies seem to be doing the minimum they feel they can get away with in running their AGMs; it reinforces the suspicion that many boards see the AGM as little more than an annual formality.
- Views on the guidance issued appears varied; my own view (and I believe that of many others) is that it has been very good; it focuses on the outcomes that companies need to achieve and leaves them to decide on the procedures and processes they should adopt.
- There are many investors who would like companies to build on experience gained over the last three months and adopt hybrid AGMs in future. Many investors cannot travel to the physical meeting. There is significant demand from investors who would like to be able to join the meeting and interact on-line. It would be a pity if an opportunity for change was lost.
It would also be helpful if we could follow up on the Legal and General case that I raised with you a few weeks ago. The issue has less to do with L&G specifically and more to do with the way in which the insurers in general report and the clarity of their reporting. This goes right to the heart of the guidance that the FRC has issued and the principle that ‘investors need-to-know’ – particularly in the current difficult and uncertain environment. The FRC has set out expectations for reporting which we strongly applaud and support. We would like to ensure that these remain at the forefront of companies’ thinking with their reporting.