The total number of attendees rose from 18,189 to 318,461 across the companies
in the sample. This may include some duplication since shareholders
could be common across multiple companies. Further, a closer look at the sample shows that most of this is from one company. RIL reported that the number of people attending its AGM rose from 1,237 people in 2019 to 308,000 in its virtual 2020 AGM.
There has been a larger bunching up of shareholder meetings this year compared to the last, said Amit Tandon, founder and MD of IiAS, which advises investors on how to vote on company resolutions. He added that not all new investors would be equally interested in interacting with management.
“Only those who are more serious...will dial in,” he said.
The Nifty500 index companies have scheduled 311 meetings in September 2020. There were 122 in September 2019. August, July and June all saw fewer meetings, shows data from IiAS.
A hybrid model where both virtual and physical meetings happen are likely to be the way forward, according to Shriram Subramanian, founder and MD of domestic proxy advisor InGovern Research Services. This would allow physically present investors to interact more directly with management. A virtual option will also make participation possible for those from other locations.
“Basically, it takes away the friction,” he said.
Doing away with physical AGMs
entirely and relying solely on the virtual form could vest a great degree of control with the company management. Shriram noted that companies can avoid inconvenient topics by asking for questions in advance. They can also hinder the participation of dissenting shareholders
since they control the technology platform.
Among the Sensex companies which have seen an increase in shareholder participation are Tata Consultancy Services (TCS) (0.11 per cent attendance versus 0.05 per cent in 2019), and Mahindra and Mahindra (0.19 per cent attendance versus 0.08 per cent in 2019).
“Given the virtual platform, the location barrier was completely taken care of, the technology of virtual platform is now much simpler and user friendly, enabling more shareholders to participate,” said a spokesperson for Mahindra. TCS
and Reliance did not respond to an email seeking comment.
Interestingly, there has been an objection to a company conducting only a physical meeting as well.
A foreign shareholder, Metrica Partners, has been accumulating the shares of N.B.I. Industrial Finance Company. The company figures among the promoters of Shree Cement. It held 2.35 per cent in the cement major as on June 30, 2020 and its shares trade at a significant holding company discount. The investor has been pushing the company to close the gap by paying higher dividends or through buybacks, according to notes on the fund’s website. It expressed disappointment in an open letter that there was no option to participate virtually in the company’s shareholder meeting. The company has announced an AGM on 28th September, Monday.
The AGM is the only occasion in which the management and shareholder-appointed directors can interact directly with shareholders on a one-to-one basis, said the company in an emailed response.
It said authorities recognise this fact and have given both the options of either holding virtual or physical meeting, with due precautions and permissions from local authorities. It added that it would ‘prefer to not let go of the opportunity of meeting the shareholders physically.’ It has therefore decided to hold a physical meeting with due approvals from all concerned.
“The virtual meeting being a... (temporary)... facility granted by the authorities...due to pandemic, has been foregone by NBI this time,” it added.