What's the prognosis for annual meetings?
In the IR calendar, spring means more than daffodils, kinder weather and the annual Niri conference. It is also the time for that traditional corporate rite of spring, the annual meeting. As this year's round comes to an end in the US and continental Europe, and gets started in Japan, the UK and beyond, it seems timely to consider the prognosis for this regular ritual.
Perhaps the first thing is to establish whether these meetings are a shareholder right, a corporate responsibility or just an anachronism. Many maintain the latter, arguing that in today's world of speedy global communications, disparate shareholder bases and the dominance of institutional ownership, their only function is to provide an occasion for a symbolic confrontation between company managements and their retail shareholders.
But this begs the question of whether such symbolic gestures justify the budget needed to ensure that those stockholders who bother to turn up - and many companies suffer the ignominy of their meetings being attended by no outside shareholders at all - can go away satisfied that they have had their chance to barrack management and eat and drink at the company's expense.
Of course, for those who wield real decision-making power at corporations - their boards, senior managements and institutional holders - the annual meeting itself is largely irrelevant. Rarely do outside shareholders with serious voting clout bother to attend on the day; and no question is really resolved as a result of events taking place actually at the meeting.
But this does not necessarily mean that the annual meeting's days are numbered. The issue epitomises a familiar dilemma for companies, who must be seen to 'care' about their retail holders - and not to complain about the cost of doing so. Institutions may argue that meetings should be abandoned, since they waste money and serve little purpose, but they are in a position to command private audiences with managements, unlike the small-scale holder.
Anyway, if companies are to stake a claim to paying more than lip service to corporate democracy, that must entail their having a duty to provide - and the shareholders a right to attend - a forum at which any investor can speak out. That forum might not have to occupy a fixed geographical space any more; but whether it takes place at a physical address or some electronic location, it should surely continue to punctuate our spring.