FRC guidance on AGMs

FRC guidance on AGMs

The FRC AGM Good Practice Guidance was published in July 2022. Cliff Weight and Peter Parry were members of the working party that helped develop the new guidance.

Cliff said: “This new FRC Guidance is another important step on the journey to wider participation and better engagement between companies and investors. Of course, it does not deal with shareholders who hold their shares via platforms – that issue is being addressed by the BEIS, the Law Commission and most importantly by Sir Douglas Flint.”

The new FRC guidance goes further than just AGM guidance:

“Effective and transparent shareholder engagement should not be limited to an annual event. Opportunities to update shareholders on company matters should be offered throughout the year, with an emphasis on ensuring all shareholders have access to similar information.”

FRC guidance

• In the period prior to the AGM, after the notice of the meeting has been published, companies may wish to offer a separate shareholder event to discuss matters pertinent to making decisions on voting at the AGM, to enable shareholders to discuss matters related to the company and receive up-to-date information about the business prior to formal voting by proxy or at the AGM.

ShareSoc’s view:

Many companies now offer a meeting/webinar which allows individual investors to listen to the company’s explanations and participate in Q&A, prior to making a voting decision. This is particularly important when some of the AGM resolutions may be controversial and/or subject to considerable dissent from some shareholders/ shareholder groups.

• FTSE 100 companies who hold such events include NatWest, Lloyds, HSBC, BP, BHP, M&S, Sainsbury, British Land, Halma. ShareSoc can help companies organise and run such events.
• Smaller companies need to maintain effective communications with their individual investors and can do so via a meeting/webinar organised by ShareSoc. Over the past three years, we have helped around 100 companies with such events.

We offer physical meetings where typically three or four companies present to 40+ investors to explain their business and future plans, with a Q&A session which may or may not be linked to an upcoming AGM. We also offer Zoom Webinars, which have proved particularly popular with sometimes several hundred attendees. These are recorded and can be available for later viewing on the company and ShareSoc websites.

FRC guidance

• Shareholders may be offered the opportunity to attend investor relations days and capital markets days (or any other similar events) to ensure they are party to the same information on company performance or engagement as other investors, whether in person or virtually.

ShareSoc’s view:

Many companies have results updates meetings/webinars to inform investors of their results and to allow Q&A. ShareSoc urges companies to make such events accessible to individual investors and not limit them to institutional investors and fund managers.

Many companies now hold investor events specifically for individual investors, where they can explain their business model, corporate strategy, future plans and latest results. Such events allow investors to decide whether to invest further or hold on to their investment.

More info is also available here.

This is an official ShareSoc News Item written by ShareSoc Director Cliff Weight.