AGMs in Covid times: Some issues take on a greater consequence

GIVEN the ban on large gatherings because of the virus pandemic, the annual general meeting (AGM) season this year will be highly unusual as all meetings will have to be conducted online.

This may result in reduced attendance compared to previous years; however, this does not mean that companies should devote less energy or focus to the conduct of their AGMs. If anything, how companies handle their AGMs this year will speak volumes about their governance practices and their sensitivity to the needs of their shareholders and the wider public. With widespread job losses or pay cuts due to the Covid-19 lockdowns and the inevitable resulting financial strain, cash payments by companies will surely be closely scrutinised.

Two items in particular usually come under focus at AGMs: executive remuneration and dividends. Both will have to be carefully dealt with, bearing in mind that shareholders almost always argue that management pay is excessive and dividends are inadequate.