Shareholders’ Unhappiness With Virtual AGMs

Photo credit: Africa Prudential

06th October, 2021

By Julius Masaba

Many shareholders have been attending annual general meetings (AGMs) physically since time immemorial. Personally, I have attended several of them, others as a proxy. It is quite an experience appearing at these meetings, getting to mingle with the people.

From the wealthy and famous to the wealthy and unfamous (minority shareholders) and the company management. Of course, not forgetting the gift hampers and the sumptuous meals. It is come kind of mini vanity fair!  It is also a day to look towards to.

One thing that surprised me the first time I attended an AGM was the age and patience of some shareholders. I was shocked to see old members like 60 years plus – a minority shareholder at that. Some have been members from the time of baby Uganda Securities Exchange (USE), two decades. Actually, those the first subscribers to Bank of Baroda stocks.

I also learnt that many other minority shareholders send their family members to be proxies. In one Baroda AGM, I sat around a table with a lady in her early forties. I engaged her on how the AGM was that day, how she became a shareholder and her experience to date. She disclosed that she was attending the AGM as a proxy (on behalf of her husband) who was on safari outside the country.

She went on to say that she rarely attends AGMS, but her husband has been having shares in the company for close to ten (10) years now. Herself, she runs an equipment and spares outlet, having done catering/restaurant too that never yielded.

It also dawned on me that most minority shareholders buy stocks as a way of keeping wealth, and they can either sell off the shares during financial emergencies or hold and transfer them to their children or wife in case of death. These are the patient and persistent stock investors.

In other AGMs, I got to hear members’ views on how those particular companies have been performing and what their next (personal) decision will be, judging from their happy responses, chats or disappointed looks.

Such experiences help you to get information or feedback from fellow shareholders, analyse it  with other data and use it to your advantage (if you are keen). Also, some ordinary shareholders see these physical  AGMs as the only opportunity for them to ask tough questions to the management.

First forward to 2020 (and going forward), all the above is (and most likely will be) no more. There may be a further deviation from the norm in the years to come.

Last year, among the warning statements given by the USE on holding AGMs, was to prohibit physical meetings. Bank of Uganda also went ahead to tell banks to defer dividends issue as it would affect liquidity and financially constrain in the economy. Banks heeded.

Thus, most companies clarified via resolutions in 2020 that they would allow meetings to be conducted online because of Covid-19. In fact most stakeholders are interesting government agencies to make changes to the current Companies Act to lawfully consider virtual AGMs.

However, regulars at AGMs expressed some regret despite agreeing that going virtual was for the best. In fact most AGMs had their agenda where holding of purely virtual or hybrid meetings going forward was to be voted.

My first virtual AGMs were bad! I can say I was (or we were) not prepared for this. Same for the organisers, and the reasons – technology adoption, absence of physical feel! No one ever knew it would come to that. Those who were used to online meetings for private  business matters found it easier. The non-tech savvy faced it rough.

I was conversant with Zoom, Skype, Google Meet, WhatsApp video and others. But the video applications the listed companies were using looked new and have never used them before. For instance, Stanbic used Vimeet for its recent AGM. Others use different apps.

It also puzzles me that Uganda companies don’t see opportunities in providing virtual meeting services. Some or even most of the service providers are from Kenya like Image Registrars. Others are foreign Lumi, apps like Vimeet, etc.

Stanbic Bank Holdings was among the first listed companies to undertake a virtual AGM. Thanks to its resolution that was passed unanimously. But for such virtual meetings, some applications may not work in some browsers or internet connectivity may be to your disadvantage.

In 2020, I joined an AGM that was held a day or two earlier and I was surprised to log in and there was no video of anything taking place. Participants in the chats were like ‘what the hell is going on here members, I don’t see any live stream!’ It was a discouraging experience.

Most of the time the virtual AGM is a ‘talk to’ not a ‘talk with’ or participatory setting. Proxy forms are sent in advance as usual. The AGM resolutions are often emailed too for shareholders to vote and then sent back. Who knows if a resolution passed was seconded or not. There is a lot being missed.

I talked to a few colleagues attending AGMs regularly and one stock market participant who opined that “The new normal is what it is. The virtual meetings are the new norm. I have attended virtual events and they are as effective in global sphere. What is key at AGMs is information flow.”

I told him physical presence helps pick up on the body language of the management. Also missed would be other intangibles, such as interacting with fellow shareholders.

Another was not happy. He disclosed that “I don’t like the experience at all. I think the listed company AGMs are geared against minority shareholders participating.” Another, working with Baroda Capital Markets gave a bluntant response – “They (virtual AGMs) are unreliable.”

A third participant sarcastically said that the virtual board presentations are okay due to improvements in ‘rehearsed presentations, speech power, choreographed AGM letters’, something that gives the board power over the AGM environment.

However, he also mentioned with concerned that resolutions are past hastily. Agendas like on board remuneration are sailing through effortlessly, banks like Stanbic and others have 99% approval on all items on its agenda. Boards also have full control over information flow.

It is like virtual AGMs are the worst thing to happen to minority shareholders, they cannot confront and overwhelm the board on dicey issues. A mere tap of the mute button and shareholders will be unable to know what another shareholder is asking about, coupled with board power to habitually cherry pick questions devastates AGM mood.

It is like the same philosophy of applying SOPs that Mr. Tibuhaburwa used against Mr. Kyagulanyi’s youth menace to nip political fracas in the bud! Listed company boards are in bliss, a perfect time to pass anything.

But, is there a way forward?


Personally, I ideally think, it should be physical as well as online (hybrid), at least when Covid-19 subsides. There are big venues to hold two (2) metre-spaced sitting. But given the circumstances, purely online is the best option. Blocking out dissent in online AGMS would be easier as a company could cite connectivity issues if someone raised prickly issues.

I suggest shareholders instead send questions to a third party, like a set of journalists, who could ask them during the AGM to ensure impartiality. But sorting questions would be another task. Another way is for a USE official to oversee the AGM and ask questions. But this becomes tricky as some may call it regulatory overreach. So, it is better that the show goes on.

Shareholders understand the situation we’re in but they’re also of a view that at least 50 to 100 minority share holders would have a physical presence. I don’t remember seeing any questions posted in Stanbic’s recent AGM. We don’t know how many queries were answered and if those chosen were the most representative of the ideal AGM queries. Leave alone those who ask about their loans and bank accounts, etc.

Deferment could lead to uncertainty and lack of clarity for the next financial year. I also think the practice of e-voting by shareholders before or during the meeting takes or has already taken some sheen off AGMS. It would be better held after the meeting.

While some of us use the meeting to touch base with the management, others use it to showcase their financial and business skills, like a certain colleague of mine I know. He has been a long active shareholder, famous for making the biggest names in corporate governance blush after exhibiting his keen analytical prowess.

Well, there is also the issue of the lunch buffet at physical AGMs and the gift hampers. This is being missed too. Instead of hiding behind the phrase ‘cutting costs’, can’t the companies at least send shopping vouchers to its shareholders?

I know many minority shareholders are silently expressing sorrow over physical AGMs being phased out and that the opportunity to interact with management is being missed. I thought perhaps writing this article would instead be helpful.

NB: This article also appeared on Medium by the same author. Click here

About the Writer

Julius Masaba is the Team Lead at Leanfoot Ventures, a private investment research and business consulting firm; a WordPress writer/blogger on startups, entrepreneurship, business and finance. He’s also the Business Development Lead at Ablestatehttps://www.theablestate.com/. He loves tech.

2 thoughts on “Shareholders’ Unhappiness With Virtual AGMs

  1. What a valid article!
    All I have read makes sense.
    Virtual AGMs have lost meaning…the links provided barely work.

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