The winners and losers of virtual AGMs

By Ian Silvera, Account Director

More than 2.5 million people sat in front of their desktops, peered into their smartphones and stared at their tablets as a white haired bespectacled 89-year-old gave them advice about stocks and shares. Amid the lockdown, Berkshire Hathaway CEO Warren Buffett, the king of the value investors, was more prime-time than ever as Yahoo Finance streamed the ‘Oracle of Omaha’ and his company’s virtual AGM out into the world.

They all came seeking information and commentary from Buffett, who has so far lived through the Great Depression, the Second World War, numerous recessions, 9/11 and the 2008 financial crisis. Don’t bet against America, was one his main takeaways from the nearly six-hour-long blockbuster event. 

Other companies, who won’t be named, have been far less transparent (borderline opaque, in fact) than Buffett and Berkshire when it comes to their virtual AGMs, using lockdowns as an opportunity to hold the meeting behind closed doors. 

There is also a risk to what Margaret Thatcher referred to as the “shareholder democracy”. The events are often the only time in a year that shareholders, whoever they may be and wherever they come from, can challenge, question or even praise management teams. 

A virtual AGM opens that opportunity up to shareholders who may never have travelled to such a meeting, many of which are held on weekdays during working hours. However, for older shareholders, typically income investors who are after hefty dividend payments, the technological shift could become more of a barrier than a benefit.

This is an aspect the UK charity ShareAction has warned about. Rachel Haworth, UK Policy Manager at ShareAction, said: “Virtual AGMs are of course a sensible solution to limiting the spread of Covid-19. However, companies should not be able to move their annual meetings online indefinitely. Not only could this exclude the older generation from attending, but it could hamper the democratic process and conveniently offer boards a way to evade trickier questions.”

However, others have welcomed the easy access of the virtual AGM, with many of Newgate’s listed clients seeing a substantial rise in attendances compared to last year.

Perhaps in the future public companies can adopt both approaches, a simultaneous virtual and real-life platform, when lockdowns are lifted? In the meantime, shareholders will have to fill their own goodie bags with freebies and discounts before they login online.