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Investors Warned of Virtual AGM Risk to Rights

The International Corporate Governance Network (ICGN) has cautioned against a rise in virtual-only AGMs, arguing that they can diminish shareholder rights and board accountability. The pandemic prompted many governments to introduce emergency legislation allowing companies to hold virtual-only AGMs, but ICGN claims that shareholders will only tolerate the format in “emergency” situations. The organisation, which represents US$70 trillion in AuM, has called for a hybrid approach to AGMs, which replicate the in-person experience as closely as possible. The ICGN Global Governance Principles, adopted in 2001, emphasise the importance of “an interactive and inclusive AGM experience for shareholders, run in a democratic and equitable way. ICGN CEO Kerrie Waring said: “ICGN calls on companies to host hybrid AGMs and for regulators to discourage the practice of legal changes to allow companies to adopt virtual-only AGMs […] We also encourage regulators to adequately consult with shareholders and stakeholders in the event any changes to regulation or legislation regarding the format of AGMs, particularly matters impacting shareholder rights, are being considered.”

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