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AGM watch

New 'normal' at AGMs provides food for thought

Shareholders must not take what was essentially a form of appreciation by companies to be an obligation now

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"Following this brief financial report, there will be a simple buffet for our shareholders."

Singapore

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 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 dabao (takeaway) some of the goodies.

At the recent OUE AGM, held at Mandarin Orchard Singapore, some shareholders could be seen loudly grumbling that the traditional Chatterbox chicken
rice was missing. In its place, were snack boxes and vouchers for the dish at the hotel's Chatterbox restaurant, an initiative by the Company to
minimise food wastage and to encourage shareholders to have a better experience of the food and services provided by the hotel. 

Companies such as Singapore Technologies Engineering (ST Engineering), on the other hand, remain unapologetic, serving only water, tea and coffee at their recent AGM. Even the S$15 FairPrice vouchers given to their shareholders last year have stopped.

But as far as these 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.

"The AGM is a useful platform for a company to communicate its long-term plans and strategies to shareholders," said Benedict Soh, executive chairman of Kingsmen Creative. "It facilitates interaction between shareholders and the company, enabling the company to address any concerns that shareholders may have."

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 may shareholders see it.

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

In a letter to BT, he related his encounter with a shareholder who told him that he "collected a hundred dollars worth of vouchers from five companies in just one day" - some of which were Suntec, Capitastar, FairPrice and Foodfare vouchers. According to Mr Sabnani, this shareholder "did not attend a single meeting!".

At the CapitaLand Commercial Trust AGM a few weeks ago, one shareholder was said to have made a remark about the S$20 CapitaMall vouchers expiring too soon on May 31, 2016.

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

David Gerald, president of Securities Investors Association (Singapore), has also highlighted the issue. "AGMs are about the annual report and shareholders seeking accountability from the board. Vouchers, gifts and food served at AGMs are a privilege, not a right of shareholders."

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.

AGM-related "food fights" are not unique to Singapore.

Recently, there were reports of shareholders at a Daimler gathering fighting over sausages, prompting the company chairman Manfred Bischoff to remark: "Either we need more sausages, or we'll have to get rid of the sausages entirely."

There seems to be no winning solution to this situation.

But 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 only given out 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.

Denis Distant, who is a keen observer of goings-on in corporate Singapore, wrote in a letter to BT that "we may not have seen the worst yet". He mentioned the struggles of his friend who had no physical copy of the annual report during a Singapore Airlines AGM a few years back.

"A friend took the mike as usual to raise questions on the AR and was, as expected, asked which page he was referring to. Of course, since no printed AR was available at the meeting, he could not give the page number and added he had read the AR online but had not brought his computer to 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".

The story above is the correct version.

Note:  An earlier version of this article incorrectly stated that OUE's AGM was held at Raffles City. It was held at Mandarin Orchard Singapore. It also incorrectly stated that OUE was forced to relent to giving out the Chatterbox chicken rice vouchers at the AGM. The vouchers and snack boxes were in fact, prepared way in advance of the AGM as a gesture of goodwill by the Company. The article above has been revised to reflect this. 

READ MORE: Issue of post-AGM treat: 'Bento' sets a practical solution