Research into AGMs finds big scope for improvement

Published April 25, 2016

Today, 12 April 2016

SINGAPORE — Extend annual general meeting (AGM) deadlines for listed companies. Introduce online voting to boost shareholder participation. Give shareholders more say in senior executive remuneration.

These are some of the recommendations made by corporate governance expert Associate Professor Mak Yuen Teen and active investor Chew Yi Hong in a report released yesterday that found much room for improvement in the conduct of shareholder meetings. “The Singapore Report on Shareholder Meetings: Shareholders Awaken?” covered 906 meetings — 711 AGMs and 195 extraordinary general meetings — conducted by 715 companies last year. The report is supported by the Singapore Exchange.

Among the key findings is a clustering of meetings in April, July and October, which fall at the end of a four-month period in which companies with financial years ending in December, March and June, respectively, need to hold their AGMs. Of the 711 AGMs, 61 per cent of meetings were held in April. In the last five business days of the month alone, 74 per cent of the April AGMs and 46 per cent of all 2015 AGMs were conducted.

This clustering makes it difficult for shareholders who hold shares in multiple companies to attend meetings during the peak months, and lead to their having to make compromises, said the report. “Regulators should consider having a public consultation with investors, issuers and other stakeholders on whether to allow AGMs to be held five months after the financial year-end,” it said.

The authors suggested that regulators consider having a public consultation on whether some form of “say on pay” for senior executives should be introduced. Regulators should also explore introducing electronic voting by shareholders, added the report.

“A successful AGM needs to achieve the following purposes: Reporting to shareholders about company matters; providing an opportunity for shareholders to ask questions; and enabling shareholders to exercise an informed vote. This study takes a good hard look at how the timing, running and form of an AGM can affect the degree to which these purposes are achieved. SGX will work together with companies and their stakeholders to carefully consider the recommendations,” said SGX chief regulatory officer Tan Boon Gin.

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