May 03, 2016

    Less freebies 'new normal' at AGMs

    AUSTERITY seems to be the name of the game at the current season's annual general meetings (AGMs), with increasing numbers of companies cutting back on the lavish layouts for shareholders and trimming costly glossy printed annual reports.

    But it's the AGM food fight which has garnered the most attention of late.

    Where full buffet spreads and scrumptious meals used to be the rule of the day in years gone by, shareholders attending AGMs this year have to make do with simple samosas, a few dim sum dishes and perhaps a popiah or two.

    And that has not gone down well with some shareholders - especially those coming armed with Tupperware containers to tar pau (take away) some of the goodies.

    But as far as companies are concerned, AGMs are held for them to meet shareholders to discuss ways to improve themselves, keep the shareholders updated about the company's annual financial report and allow for some interaction between directors and officials and their shareholders.

    In short, AGMs are not eat-fests. These gatherings are a platform for shareholders to understand the companies better, in order to decide what to do with their shares.

    But that is not how many shareholders see it.

    Former BT editor and activist Mano Sabnani said companies had "moved away from buffet and vouchers" because a higher turnout due to the food factor resulted in "less attention on the AGM".

    This raises concerns over the etiquette of shareholders at AGMs. What was once a form of appreciation, by companies providing buffets and vouchers to their shareholders for taking the time off to attend their AGMs, has now become an obligation.

    But some shareholders argue that the removal of buffet spreads could decrease interaction between shareholders and directors.

    Directors no longer have a reason or a platform to stay behind to engage their shareholders, thus, reducing the chances of the shareholders to gather more knowledge of the companies, the argument goes.

    Mr Sabnani reckons that one "practical solution" would be to provide "set meals in a package or what is dubbed bento sets".

    "Everyone gets his or her share and there are often Western as well as Asian sets available. There is mixing between shareholders and senior management. The packages are given out only when the meeting has ended, avoiding the rush and disruption evident in buffet spreads."

    Another gripe that is starting to be sounded at AGMs is the use of CD-ROMs for annual reports (ARs). Many companies have decided to put their ARs in these discs to save on printing and paper costs.

    But this practice is getting the same shareholder reactions as when food is taken off the table at AGMs. Many shareholders object to moving away from the printed AR, pointing out that not only is it difficult to read the reports on the computer, it is also impossible to highlight and mark the information they wish to take note of, and perhaps raise at the AGM.

    As these companies strive to move along with the times, change is inevitable.

    Realistically, it is impossible to please everyone, and if these companies see fit to cut costs (read: no food) and save the environment (read: ARs in CD-ROM format), shareholders just have to get used to the "new normal".