Top finance directors have told the government they want agms scrapped or overhauled, writes Phillip Inman.
A delegation of FDs met with Margaret Beckett, president of the Board of Trade, to voice their concerns that agms have become outdated vehicles for making strategic decisions and for communicating with shareholders.
Protestors have disrupted several large companies’ agms this year, including British Aerospace and Shell. Smaller companies have complained of spending thousands of pounds on agms where only a handful of shareholders turn up.
Brian Birkenhead, deputy chairman of the 100 Group of FDs, told Beckett that agms should be scrapped unless the Department of Trade & Industry could bring forward proposals for a radical overhaul.
‘If the agm must stay, it should be more interesting.’
Beckett announced a company law review last month, which will include an examination of the agm role.
In addition to this, she said she wanted a vote at the agm on the remuneration committee’s report, and refused to rule out requiring ‘more informative disclosure on performance or requiring directors to stand for re-election every year so shareholders can comment on the performance of remuneration committee members’.
But Birkenhead said he expected the DTI to do little more than ‘just fiddle at the edges’. Much of the company information, however, could be communicated to shareholders by mail, and then voted on through a postal ballot.
Other proposals could centre on the demand from several companies to debate non-financial issues at a special public meeting.
Votes on the re-appointment of directors and auditors for instance could then take place by post without excluding members of the public from voicing their concerns.
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