- Firms say face-to-face meetings are costly and can be disrupted by protesters
Defence giant BAE Systems and luxury car maker Aston Martin have become the latest companies to make their annual general meetings online only.
It follows The Mail on Sunday’s revelation that Britain’s biggest stock market company, drugs giant AstraZeneca, had in effect barred shareholders from attending its annual meeting in person by adopting a purely digital format, and that toothpaste-maker Haleon had done the same.
Campaigners say firms are doing this to stifle debate and dissent in a blow to shareholder democracy.
They also claim the controversial move could trigger legal challenges. Company law is unclear about what form an annual meeting should take.
The meeting must be held in a physical location but it is not stipulated whether the board must be present or investors allowed in.
Firms argue that face-to-face annual meetings are costly to stage and can be disrupted by protesters – as happened at Drax last week when environmental activists forced the energy generator’s meeting to end early.
Stifling debate: Defence giant BAE Systems and luxury car maker Aston Martin have become the latest companies to make their annual general meetings online only
Companies rushed to adopt digital meetings during the pandemic. Most have since moved to a ‘hybrid’ model, which continues to give shareholders the choice of turning up in person to hold boards to account.
BAE Systems says shareholders can log on to its digital annual meeting from a conference centre in Farnborough, Hampshire, where the firm is based, but that no board directors will be present.
Aston Martin has gone further, saying its annual meeting would be held ‘electronically by audio webcast’. No physical location is given for where the event will actually take place.
Lawyers say the Companies Act, which was drafted in 2006 before online meetings became popular, is ambiguous on this point. AstraZeneca held its annual meeting in a broadcast suite at The Oval cricket ground in South London.
‘Holding a completely virtual AGM with no ability to attend physically at all probably does call into question the validity of resolutions at the meeting, such as the election of directors, appointment of auditors, and declaration of dividends,’ said one legal expert.
But there is no legal requirement for all directors to attend an annual meeting, whether in person or not. Some say they struggle to physically make meetings because they are based outside the UK. And directors don’t have to answer any questions posed except in the broadest of terms.
Some companies have gone back to a hybrid format under pressure from shareholders.
They include Marks & Spencer, which was accused of being ‘arrogant’ and setting ‘an appalling precedent’ after trying to make its annual meeting online-only.
Firms that have shifted to online-only meetings include shipping broker Clarkson, which last week suffered its ninth successive year of shareholder revolts over boardroom pay.
Loss-making Aston Martin has also been dogged by rows with shareholders over boardroom pay and perks. It paid its former boss Amedeo Felisa £1.6million to commute by private jet from his home in Italy to the company’s head office in the Midlands.
Both BAE Systems and Aston Martin hold their annual meetings on Wednesday.
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This article was originally published by a www.dailymail.co.uk . Read the Original article here. .