How to deter shareholders who eat-and-run at AGMs

The issue of what kind of treat should follow the annual general meetings (AGMs) of listed companies remains unresolved.

Many shareholders feel they should be rewarded or given something when they faithfully turn up to attend the AGM and to vote in support of various resolutions (which, incidentally, are often not well understood by them).

In the past, companies would commonly lay out buffets. These could be simple catered meals on their premises or lavish spreads in five-star hotels. Either way, some people would often rush for the food and cart away quite a lot of it even before the meeting ended. Such behaviour left a bad taste in the mouth for many.

In recent years, companies have turned to issuing cash vouchers when shareholders register for the meeting. But many shareholders are turning up just to collect the vouchers. Some do not even wait for the meeting to start; they collect the vouchers and then head for the next AGM where there are other vouchers to be collected.

Given the rush by companies to meet the end-April reporting deadline and consequent bunching of meetings in the last two weeks of the month, there could be 20 to 50 AGMs held each day.

One shareholder told me he collected $100 worth of vouchers from five companies in just one day. He did not attend a single meeting.

Some companies, worried that too many will turn up if food is provided or vouchers are given, have done away with both, offering just coffee, tea and water after the meeting. While some shareholders are happy that the crowd is smaller and the AGM can focus on discussing business and prospects of the group, many are unhappy with the decision.

I think it is good to have shareholders mixing with one another and with the company directors after an AGM. So a practical solution would be to offer bento sets, which are to be handed out only when the meeting has ended. Everyone gets his share, avoiding the rush and disruption when a buffet is provided.

One company, an engineering systems integrator, stood out among the many that organised AGMs last month. It offered coupons for both a cash voucher and a bento set, but the coupons could be redeemed only after the meeting.

The result was an orderly, fruitful meeting and a leisurely meal after that. Perhaps more firms can follow its example.

Mano Sabnani

A version of this article appeared in the print edition of The Straits Times on May 03, 2016, with the headline 'How to deter shareholders who eat-and-run at AGMs'. Print Edition | Subscribe