The digital age has significantly transformed the dynamics between boards, management, and shareholders. Annual general meetings (AGMs), once physical gatherings, have now predominantly shifted to virtual shareholder meetings (VSMs). This transition not only increases shareholder participation by overcoming geographical and time constraints but also lowers costs and reduces environmental impact, as noted by Swatika Rajaram from Broadridge Financial Solutions.
However, this shift has also amplified the voice of activist shareholders and advocacy groups, who leverage social media and 24/7 news cycles to bring attention to their causes and potentially disrupt AGMs. The U.S. Securities and Exchange Commission's (SEC) directives have aligned with current administration priorities and media focus, which in turn emboldens social issue campaigners throughout the year.
Activist campaigns are no longer confined to a narrow pre-AGM window; they have evolved into year-round digital movements aiming to influence corporate policies through engagement, publicity, and leveraging AGMs for maximum exposure. Digital tactics such as deepfake audio or video clips pose new threats that require companies to maintain vigilant monitoring and rapid response capabilities.
Boards and management teams must be prepared to address an array of issues at AGMs, ranging from traditional business performance and ESG concerns to emerging topics like geopolitics, AI ethics, marketing practices, and hiring strategies. Companies must use AGMs as platforms to articulate their strategic vision, showcase competent management, and reinforce their commitment to creating shareholder value while navigating complex regulatory landscapes.
The quality and composition of boards are under greater scrutiny than ever, necessitating a diverse blend of backgrounds and skills that include expertise in both conventional and emerging sectors. Boards are evolving beyond being dominated by former CEOs to incorporate a broader set of talents, including digital media savviness, cybersecurity, and risk management proficiency, as Alan Guarino from Korn Ferry highlights.
In conclusion, there is an ongoing evolution where boards, management, and their advisors must adapt to the digital era by reimagining shareholder interactions and engagement strategies. Companies need to effectively manage perceptions, anticipate stakeholder concerns, and demonstrate their ability to navigate challenges and capitalize on opportunities in today’s interconnected world.