Ministers continue to advance proposals allowing companies to conduct annual general meetings (AGMs) exclusively online, a shift that critics argue enables firms to evade accountability more easily.
Government’s Modernization Efforts
The initiative aims to update company law for the digital age, making it simpler for businesses to adapt their practices. Blair McDougall, Minister for Corporate Governance, stated that these reforms empower directors and shareholders to choose fully virtual AGMs tailored to their company’s needs.
Already, major firms like AstraZeneca in the pharmaceuticals sector and BAE Systems in defense have adopted digital-only formats, preventing shareholders from attending in person. This trend raises concerns about diminishing direct engagement in corporate decision-making.
Concerns from Investor Groups
Luke Hildyard of advocacy organization ShareAction highlighted the risks, noting that online-only meetings allow boards to control discussions more tightly, sideline shareholder questions, and escape thorough examination. He warned that such practices could result in poorer governance and flawed business choices.
Caroline Escott, chairwoman of the Governance for Growth Investor Campaign, which represents £150 billion in assets, echoed these worries. She explained that virtual formats complicate efforts to challenge company leadership, undermine efforts toward sustainable growth, erode trust among investors, and potentially weaken the UK’s overall economic stability.
These developments come amid broader calls for preserving traditional in-person meetings to foster transparency and robust shareholder participation in the FTSE 100 and beyond.
