SEASON OF AGMs – ‘VIRTUALLY’ A NEW REALITY

Usually, this time of the year, running till August, Birla Matoshri hall in Mumbai is booked – this is their best season – the Annual General Meeting or AGM season. But this time around, like everything else, the hall looks bleak and empty, there is no activity, no booking and no AGM.

Well, like everything moving online in this pandemic, all AGMs too have gone digital. Tomorrow, TCS will host its AGM and for the first time ever in the history of India, it will be held virtually. It is on a first-come-firs serve basis and will be hosted through the NSDL website.

Members will be able to attend the AGM through video conferencing or other audio visual means or view a live webcast provided by NSDL website and vote by using their remote e-voting login credentials.  MCA issued a circular stating that attendance of members in these virtual meetings needs to be tracked to verify the quorum. And everyone is wondering how the company will achieve the much-needed two-way communication, especially when some 500-odd shareholders attend the meeting physically.

SBI today announced that it will be holding its e-AGM on 17th June and Reliance, which holds its AGM usually in August, is yet to announce its date and mode. But this will be largely the mode – e-AGM.

Many shareholders who are regular attendees are not liking this new adjustment. For many these AGMs are a chance to interact directly with the top management, ask probing questions and for some like ace investor, Ashalata Maheshwari, a time to recite shayari. Many wax eloquent about the management while some rave and rant about the lack of gifts or cold food. Yes, the food and gifts are a big attraction of these AGMs – some go only for that. So this interactive and very lively meet between the shareholders and the management will be sorely missed. It is the one time when the minority shareholder is able to put the management in the corner and ask some really pointed questions. Wonder how that will happen in e-AGM where the management can easily duck the question or blame it on connectivity.

Many say that this is the best way ahead and even in the future, e-AGMs should become the norm. It is cost saving and for many, most of them who never attend the AGMs, a complete waste of time but because it is mandatory, e-AGMs can be done in a jiffy from the comfort of one’s office and home.

Now making e-AGMs a norm would really be sad as AGMs are an event and for many, something they look forward to. Listening today to stories of how shareholders saw JRD or Dhirubhai Ambani or Aditya Birla are things of legend and to give a miss to such an opportunity would be tragic.

Companies as such operate like personal fiefdoms of the management and an AGM is the only place where the small shareholder’s voice can reach them even if it is ineffective. e-AGMs remove the essence the spirit of the company. Today, technology is merely a means and should not be used to disrupt the core value of trust, accountability and governance.

Remember, Berkshire’s AGM is a festival and ditto for many companies here in India – e-AGM should be a one-off and not the norm.