Institutional EYE

Commentary on Corporate Governance Issues

Virtual shareholder meetings are here to stay

September 17, 2020

Even the most sceptic will admit that virtual meetings are cheaper, greener and save time. But we should not let these pluses detract from the need to make shareholder meetings more relevant.

 

““Satyug beeta, Kalyug aaya, par aap ka roop badal na paya, Aap aaj bhi wahi ho, jo dhool mai phool khilade”

(Good times give way to difficult days. Yet all through this period of momentous change, you have retained the ability to turn dust to gold).

 

For the occasional attendee, this bit of poetry might lighten the mood, and provide a welcome distraction from the regimented format set-forth well in advance of the meeting and based on regulations that govern their conduct. But for those retail investors who take their investments seriously, these meetings are the one annual forum to gain insights to the company’s working and question its management.  Company’s they complain, are all too happy to have the meeting hijacked by a handful of investors, who have no interest in the actual working of the company and only show-up because it is something to do on an otherwise dull afternoon. And the refreshments.

 

After the initial set of physical meetings started getting postponed from end-March, the Ministry of Corporate Affairs by early April issued guidelines doing away with a physical quorum and spelling-out rules for virtual meetings. Companies and investors have been quick to embrace these: what has been accomplished in the last quarter was unimaginable when the MCA issued its guidelines in early April. The smoothness with which all pieces fit together is remarkable.

 

Virtual meetings have no doubt preserved the form of AGM’s but have also provided us with a window to rethink their substance. We must be bold in reimagining how these meetings become relevant again.

 

Read the full blog here.

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