CorpComms Magazine

The face of that great corporate tradition, the annual general meeting, has changed considerably over the course of the past three decades. Gone are the days when these yearly gatherings were the only opportunity for shareholders to meet with the board, call them to account and air their grievances. So what role do annual meetings play in today's corporate world, and indeed, how are these events now perceived by companies? Are they a tiresome necessity or a key communications tool? Reg Hoare, managing director of MHP, suggests that, in many cases, companies regard their annual meetings as a costly and inconvenient chore, approaching them with some mixture of 'ambivalence and trepidation'. Ambivalence because these meetings no longer hold the same importance that they used to for most large companies, since they tend to be populated by retail investors who en masse might own less than one per cent of the business. And trepidation due to the very real potential for enormous embarrassment at the hands of activist and disgruntled shareholders.

Similarly, annual meetings are a huge logistical undertaking - companies have to source a venue, arrange catering and security and publicise the event appropriately - which, coupled with the fact that they are a mandatory fixture of the corporate calendar, means it is little wonder that, as Stephen Watson, managing director of CTN Communications concludes, 'most boards, and indeed most IR and communications professionals in these companies approach them with a degree of loathing. If you didn't have to do an annual meeting, you probably wouldn't.'

But there is little chance that companies will be given a reprieve from the ordeal. As Bruce Todd, consultant at Crown Business Communications points out, the chequered history of financial services companies and the past behaviour of some large organisations means it is unlikely the government would allow the abolition of annual meetings. He says: 'The legislative environment, at a very basic level, will continue to want companies to talk live to their shareholders and to give shareholders an opportunity to question the board. 'This is a very basic right that shareholders and organisations do, and should, have - and something which regulators will be very, very cautious about ever legislating away altogether.' At a basic level, annual meetings are an opportunity for a business to report on their progress, vote on resolutions, and foster a dialogue between company and shareholder. But they can also be an incredibly useful tool for developing relationships and managing a company's reputation.

Bringing the brand to life

Charles Moyle, director of events and communications agency Grass Roots, believes many companies are missing a trick in not using annual meetings as brand building exercises. 'There's no reason at all, especially if you are taking over a large venue, that companies shouldn't use things like breakout rooms to bring their product and brand to life, and enable institutions to understand a lot more about their business,' he says. 'Equally, too many annual meetings just concentrate on what has already happened. They may give a small update on what's going to happen in the future, but what they really should be doing is using it as a showcase for exciting technologies and the way forward for them as a company.'

Another common mistake, Moyle believes, is to 'bombard' attendees with an avalanche of overly complex messages. He advises that the key to success is to 'firstly, make the subject matter as simple to understand as possible, and concentrate on fundamental messages, and secondly - make sure that you are communicating in a hugely engaging way. People don't want to be bored with death by PowerPoint! 'There are thousands of things that one can do to make use of new technology brilliantly - an annual meeting is a very conservative piece of content, but you don't need to communicate it in a conservative way or in a gimmicky way. You just need to actually bring it alive by using some creativity.'

Although, to date, examples of such activity have been rather limited, social media undoubtedly has its place in the annual meeting of the future. Social networking sites such as Twitter provide a highly efficient and inexpensive tool for companies to engage the press and relevant audiences prior to, during and after the event itself - building anticipation and increasing the longevity and reach of their message.

CTN's Watson says: 'The fundamental purpose of an annual meeting is about transparency, good governance, and giving stakeholders in the business access to the decision makers in their company. Social media could be a positive channel since it would work to 'free up' the meeting, and any tools that work in that respect add something useful to the mix. This is particularly relevant to technology companies, the telecommunications companies and so forth, who almost have an obligation to push the boundaries and try to connect with people through a whole host of different formats.'

Social networking aside, many companies have been considering how new technology can be integrated into the annual meeting environment, experimenting with channels such as webcasting and video streaming to make the meeting accessible for those shareholders who are unable to attend. Some companies provide an opportunity for the pre-registration of questions online and even e-voting, but, since these services tend to close well in advance of the actual event, they currently tend to supplement rather than replace elements of the physical meeting.

A gradual process

But will there come a time when investors will be able to engage in a virtual annual meeting? Adrian Parker, Client Partner at SAS Design, believes so. He says: 'I think the notion of attending an annual meeting virtually, via your laptop at home, will soon become very normal, because that will just be the accepted way of communicating. We all accept that we can watch TV on our laptops over our broadband connections at the moment - so why not annual meetings? Why do you actually have to have a physical annual meeting? It could be something which is done as a live broadcast where shareholders can log in and see what's going on, and have the opportunity to engage, cast votes live, ask live questions, and actually be seen as well.'

Similarly, Watson muses that 'there is a prize now for using new technologies to move beyond the physical meeting. I don't think it's beyond the realms of possibility that annual meetings in the future might actually come from television studios, with the number of people physically attending greatly reduced.'

There is no technological barrier to creating a virtual annual meeting, and there are obvious benefits - both environmental and financial, especially for companies with a high proportion of international investors. Such innovations also have the added advantage of providing a greater degree of openness and potentially widening the audience of their event.

But bringing the annual meeting fully into the digital age needs to be executed within the confines of existing legislation. This will need time to evolve and accommodate the usage of new technology. Until the regulatory framework is crystal clear, many companies will understandably be cautious about taking this route.

There are also issues concerning security. In a physical annual meeting, verifying shareholders is simple, but in the virtual realm it is conceivable that companies could leave themselves open to impostors voting on important resolutions. However, these risks could be mitigated through, for example, diligence in the preregistration stage and the establishment of audit trails. Hoare concludes that the future will most likely hold 'more of the same and only gradual progress...given that they are a rather unwieldy but necessary corporate evil and it would take considerable political will to change matters. There is no doubt that some sort of online interactive forum could ultimately replace the formal meeting but I don't sense that there is a great urgency or political will to bring such a change forward.'

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