What are Annual General Meetings?

A Quick Guide for Everyday Retail Investors in the UK

13 Jun 2024

Annual General Meetings (AGM) are the core touch point between shareholders and the executive of a company. Understanding how they work and when they are is fundamental for anyone who wants to be an effective steward of their portfolio.

At Root we have prepare a quick guide with the key information to be aware of when it comes to AGMs in the UK.

1. What is an Annual General Meeting?

An AGM is like the company’s yearly town hall meeting. It’s a mandatory yearly event where shareholders gather to get the latest updates, ask questions, and vote on important company matters. Every public company in the UK is required by law to hold an AGM within six months of its financial year-end.

AGMs are a cornerstone of transparency and accountability with financial markets, giving retail investors of all sizes the chance to engage directly with the company's leadership.

2. What is Discussed?

Here’s what you can expect to be on the agenda at an AGM:

  • Review of Financial Statements: The company shares its latest audited financial or annual report, which can often be 100s of pages of information about its performance over the past year, as well its financial health going forward.

  • Company Strategy: The CEO and other executives provide updates on the company’s performance and future plans.

  • Company Resolutions: This includes voting on directors on the board, remuneration for the top executives, dividends to be paid out to shareholders and shareholder led resolutions.

  • Shareholder Resolutions: This is where shareholders, like you, can propose and vote on resolutions. Topics often include Environmental, Social, and Governance (ESG) issues, such as sustainability practices and corporate social responsibility.

3. Voting at AGMs

Voting at AGMs is your chance to align your values with those of the companies you invest in. Here’s how it works and what you need to know:

  • Resolution Types: There are two main types of resolutions you might vote on:

    • Ordinary Resolutions: These require a simple majority (over 50%) to pass. They cover routine matters like approving financial statements, electing directors, and declaring dividends.

    • Special Resolutions: These require a higher threshold (75% approval) and typically deal with more significant changes, such as altering the company’s articles of association or approving major mergers and acquisitions.

  • Topics Voted On: Voting topics can range from the approval of the annual report and accounts, re-election of directors, remuneration policies, dividends, and shareholder-proposed resolutions often focused on ESG issues.

  • Proxy Voting: In order to vote as an individual you often need to either ask your trading platform to do it or you can check out Root’s guide to proxy voting on different providers.

4. How to Keep on top of AGMs in Your Portfolio

Staying informed about AGMs is crucial for active participation in your investments. Here’s how you can stay updated and attend AGMs:

  • Let your broker know: Some trading platforms will notify you about upcoming AGMs for the companies you’ve invested in and help you attend them when you want.

  • Company Websites and Investor Relations: Regularly visit the investor relations section of company websites for AGM dates and details.

  • Use Root! Connect your portfolio to our platform to receive timely updates on AGMs and the topics being discussed. Our mission is to foster holistic shareholder engagement, ensuring you stay informed and involved.

5. Difference Between an AGM and an EGM

While AGMs are held annually, Extraordinary General Meetings (EGMs) are convened as needed to address urgent or significant matters that can’t wait until the next AGM. Here are the key differences:

  • Frequency: AGMs are held once a year, while EGMs can be called at any time when urgent issues arise.

  • Purpose: AGMs cover routine annual business such as financial reviews and director elections. EGMs focus on specific, often urgent issues like mergers, acquisitions, or major policy changes.

  • Notice Period: Both AGMs and EGMs require advance notice to shareholders, but the notice period for EGMs may be shorter due to the urgent nature of the matters being addressed.

Conclusion

AGMs are a vital cog in the shareholder engagement process, providing a platform for shareholders to engage with company leadership, review performance, and influence important decisions. By staying informed and participating in AGMs, you can ensure your interests are represented and contribute to the company's success. It’s important to note that the rights and practices discussed are specific to UK shareholders. We’ll cover shareholder rights in other countries in future articles.

Disclaimer

This article is for informational purposes only and does not constitute legal, financial, or investment advice. The information provided may not be comprehensive or up-to-date. Readers should conduct their own research and consult with a qualified financial adviser or legal professional before making any investment decisions. The author and publisher are not liable for any actions taken based on the information provided in this article.

Annual General Meetings (AGM) are the core touch point between shareholders and the executive of a company. Understanding how they work and when they are is fundamental for anyone who wants to be an effective steward of their portfolio.

At Root we have prepare a quick guide with the key information to be aware of when it comes to AGMs in the UK.

1. What is an Annual General Meeting?

An AGM is like the company’s yearly town hall meeting. It’s a mandatory yearly event where shareholders gather to get the latest updates, ask questions, and vote on important company matters. Every public company in the UK is required by law to hold an AGM within six months of its financial year-end.

AGMs are a cornerstone of transparency and accountability with financial markets, giving retail investors of all sizes the chance to engage directly with the company's leadership.

2. What is Discussed?

Here’s what you can expect to be on the agenda at an AGM:

  • Review of Financial Statements: The company shares its latest audited financial or annual report, which can often be 100s of pages of information about its performance over the past year, as well its financial health going forward.

  • Company Strategy: The CEO and other executives provide updates on the company’s performance and future plans.

  • Company Resolutions: This includes voting on directors on the board, remuneration for the top executives, dividends to be paid out to shareholders and shareholder led resolutions.

  • Shareholder Resolutions: This is where shareholders, like you, can propose and vote on resolutions. Topics often include Environmental, Social, and Governance (ESG) issues, such as sustainability practices and corporate social responsibility.

3. Voting at AGMs

Voting at AGMs is your chance to align your values with those of the companies you invest in. Here’s how it works and what you need to know:

  • Resolution Types: There are two main types of resolutions you might vote on:

    • Ordinary Resolutions: These require a simple majority (over 50%) to pass. They cover routine matters like approving financial statements, electing directors, and declaring dividends.

    • Special Resolutions: These require a higher threshold (75% approval) and typically deal with more significant changes, such as altering the company’s articles of association or approving major mergers and acquisitions.

  • Topics Voted On: Voting topics can range from the approval of the annual report and accounts, re-election of directors, remuneration policies, dividends, and shareholder-proposed resolutions often focused on ESG issues.

  • Proxy Voting: In order to vote as an individual you often need to either ask your trading platform to do it or you can check out Root’s guide to proxy voting on different providers.

4. How to Keep on top of AGMs in Your Portfolio

Staying informed about AGMs is crucial for active participation in your investments. Here’s how you can stay updated and attend AGMs:

  • Let your broker know: Some trading platforms will notify you about upcoming AGMs for the companies you’ve invested in and help you attend them when you want.

  • Company Websites and Investor Relations: Regularly visit the investor relations section of company websites for AGM dates and details.

  • Use Root! Connect your portfolio to our platform to receive timely updates on AGMs and the topics being discussed. Our mission is to foster holistic shareholder engagement, ensuring you stay informed and involved.

5. Difference Between an AGM and an EGM

While AGMs are held annually, Extraordinary General Meetings (EGMs) are convened as needed to address urgent or significant matters that can’t wait until the next AGM. Here are the key differences:

  • Frequency: AGMs are held once a year, while EGMs can be called at any time when urgent issues arise.

  • Purpose: AGMs cover routine annual business such as financial reviews and director elections. EGMs focus on specific, often urgent issues like mergers, acquisitions, or major policy changes.

  • Notice Period: Both AGMs and EGMs require advance notice to shareholders, but the notice period for EGMs may be shorter due to the urgent nature of the matters being addressed.

Conclusion

AGMs are a vital cog in the shareholder engagement process, providing a platform for shareholders to engage with company leadership, review performance, and influence important decisions. By staying informed and participating in AGMs, you can ensure your interests are represented and contribute to the company's success. It’s important to note that the rights and practices discussed are specific to UK shareholders. We’ll cover shareholder rights in other countries in future articles.

Disclaimer

This article is for informational purposes only and does not constitute legal, financial, or investment advice. The information provided may not be comprehensive or up-to-date. Readers should conduct their own research and consult with a qualified financial adviser or legal professional before making any investment decisions. The author and publisher are not liable for any actions taken based on the information provided in this article.

Annual General Meetings (AGM) are the core touch point between shareholders and the executive of a company. Understanding how they work and when they are is fundamental for anyone who wants to be an effective steward of their portfolio.

At Root we have prepare a quick guide with the key information to be aware of when it comes to AGMs in the UK.

1. What is an Annual General Meeting?

An AGM is like the company’s yearly town hall meeting. It’s a mandatory yearly event where shareholders gather to get the latest updates, ask questions, and vote on important company matters. Every public company in the UK is required by law to hold an AGM within six months of its financial year-end.

AGMs are a cornerstone of transparency and accountability with financial markets, giving retail investors of all sizes the chance to engage directly with the company's leadership.

2. What is Discussed?

Here’s what you can expect to be on the agenda at an AGM:

  • Review of Financial Statements: The company shares its latest audited financial or annual report, which can often be 100s of pages of information about its performance over the past year, as well its financial health going forward.

  • Company Strategy: The CEO and other executives provide updates on the company’s performance and future plans.

  • Company Resolutions: This includes voting on directors on the board, remuneration for the top executives, dividends to be paid out to shareholders and shareholder led resolutions.

  • Shareholder Resolutions: This is where shareholders, like you, can propose and vote on resolutions. Topics often include Environmental, Social, and Governance (ESG) issues, such as sustainability practices and corporate social responsibility.

3. Voting at AGMs

Voting at AGMs is your chance to align your values with those of the companies you invest in. Here’s how it works and what you need to know:

  • Resolution Types: There are two main types of resolutions you might vote on:

    • Ordinary Resolutions: These require a simple majority (over 50%) to pass. They cover routine matters like approving financial statements, electing directors, and declaring dividends.

    • Special Resolutions: These require a higher threshold (75% approval) and typically deal with more significant changes, such as altering the company’s articles of association or approving major mergers and acquisitions.

  • Topics Voted On: Voting topics can range from the approval of the annual report and accounts, re-election of directors, remuneration policies, dividends, and shareholder-proposed resolutions often focused on ESG issues.

  • Proxy Voting: In order to vote as an individual you often need to either ask your trading platform to do it or you can check out Root’s guide to proxy voting on different providers.

4. How to Keep on top of AGMs in Your Portfolio

Staying informed about AGMs is crucial for active participation in your investments. Here’s how you can stay updated and attend AGMs:

  • Let your broker know: Some trading platforms will notify you about upcoming AGMs for the companies you’ve invested in and help you attend them when you want.

  • Company Websites and Investor Relations: Regularly visit the investor relations section of company websites for AGM dates and details.

  • Use Root! Connect your portfolio to our platform to receive timely updates on AGMs and the topics being discussed. Our mission is to foster holistic shareholder engagement, ensuring you stay informed and involved.

5. Difference Between an AGM and an EGM

While AGMs are held annually, Extraordinary General Meetings (EGMs) are convened as needed to address urgent or significant matters that can’t wait until the next AGM. Here are the key differences:

  • Frequency: AGMs are held once a year, while EGMs can be called at any time when urgent issues arise.

  • Purpose: AGMs cover routine annual business such as financial reviews and director elections. EGMs focus on specific, often urgent issues like mergers, acquisitions, or major policy changes.

  • Notice Period: Both AGMs and EGMs require advance notice to shareholders, but the notice period for EGMs may be shorter due to the urgent nature of the matters being addressed.

Conclusion

AGMs are a vital cog in the shareholder engagement process, providing a platform for shareholders to engage with company leadership, review performance, and influence important decisions. By staying informed and participating in AGMs, you can ensure your interests are represented and contribute to the company's success. It’s important to note that the rights and practices discussed are specific to UK shareholders. We’ll cover shareholder rights in other countries in future articles.

Disclaimer

This article is for informational purposes only and does not constitute legal, financial, or investment advice. The information provided may not be comprehensive or up-to-date. Readers should conduct their own research and consult with a qualified financial adviser or legal professional before making any investment decisions. The author and publisher are not liable for any actions taken based on the information provided in this article.

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© 2024 – All Rights Reserved - Root

© 2024 – All Rights Reserved - Root