Virtual technology and remote meetings have revolutionised how companies communicate in the corporate world.
Live broadcasts and real-time digital conversations allow investor relations teams to reach beyond the boardroom and connect with shareholders wherever they are.
This ability to reach investors and stakeholders virtually has opened new windows of opportunity for IR teams to not only increase productivity but also profits.
In our already globalised world, virtual meeting tools like video conferencing, cloud-based software and apps are bridging the gap between continents and making Australian companies in particular more connected to the international market.
These services also equip executives, shareholders and other stakeholders with the ability to connect at the click of a button.
Embracing this technology is an essential practice for all modern IROs seeking to obtain and sustain positive relationships with investors. Data has revealed the percentage of shareholders attending Annual General Meetings (AGMs) is in steady decline, falling to just 18% in 2018. The share registry Computershare reported around 41.7% of shareholders did vote online, which increase 65.53% over the past 5 years.
These figures clearly demonstrate the importance of embracing the remote and virtual meeting technologies on offer. Harnessing the power of these tools is key to improving the attendance and engagement of company stakeholders in events like AGMs and Investor Days.
Several factors are involved in the notable drop-off in engagement, but insufficient use of technology has been acknowledged as a significant roadblock. Some Australian companies are realising the benefits of replacing face-to-face AGMs with virtual meetings including lowering costs and increasing engagement – allowing investors to attend from anywhere in the world.
Data collected by Equiniti on Jimmy Choo company shareholders, has reflected the trend toward modernising AGMs and investor outreach. Of more than 5000 surveyed, Equiniti found 76% of shareholders wanted companies to do more and expand their engagement efforts in the area of investor relations. While 44% of this group said they would be more inclined to attend virtual AGMs. Jimmy Choo and Equiniti worked together in response to these insights, and set to work developing a native based application for smartphones and tablets which would allow shareholders to vote in AGMs remotely, submit questions for Q&A sessions and view meeting presentations. Jimmy Choo experienced the immediate benefit of hosting an AGM with significantly increased attendance rates. This case shows how IROs can utilise virtual meeting technology to facilitate events like AGMs and Investor Days, and engage with as many shareholders as possible to maximise the influence of these events.
Ipreo’s Corporate Access Survey identifies the rising popularity of online events, with 94% of those who took part in virtual meetings in 2015 indicating they plan to increase or sustain their current level of virtual meeting use.
The Australian Institute of Company Directors reported that some ASX-listed organisations, with extensive retail shareholders, were spending as much as $1 million on their AGM. Not only a huge financial investment, companies dedicate extensive time planning these annual events, and may only see the return of 100 retail shareholders in attendance who collectively own less than 1% of the company’s shares and as a result have an insignificant impact on voting outcomes. Given these poor outcomes and exorbitant costs, it is clear to see why organisations, like Xero Group, have adopted virtual meeting technology, allowing them to expand their engagement and make significant cost savings in the process.
In 2016, the Financial Review reported on the first hybrid virtual AGM held by the ASX-listed organisation, Link. The hybrid approach to an AGM adopts the traditional physical AGM and combines this with a virtual meeting component for those who are unable to attend. Speaking on the success of this event, Link’s chief executive said:
“We had twice as many online as we did in the room. It’s just a no-brainer. Why wouldn’t you offer an online option and try to engage as many shareholders as you can? It seems crazy not to. A few years ago people would have said the AGM is dead as a dodo but this is reinvigorating the whole process, and a lot of our clients are saying they will look at it next year.” (http://www.afr.com/leadership/dying-agm-is-virtually-reborn-20161202-gt2qff)
Important to consider, also, Australian Corporations Law currently requires a company to hold a physical AGM, and therefore prohibits a wholly virtual meeting and gives rise to the hybrid format. However, given that countries like New Zealand have amended legislation to allow for standalone virtual AGMs, there is an expectation that Australian law will be amended to allow organisations here to host such events.
Investor Days have proven to be an increasingly popular way to maintain close relationships with shareholders and can be utilised to provide company updates, present strategic goals, introduce new management or respond to particular concerns which are important to resolve. These events could be held at a variety of times throughout the year, depending on the nature of the content being presented.
Utilising virtual meeting technology for these events could work in a very similar way to the previously presented cases of virtual AGMS. This may involve live streaming the event for investors to access wherever they may be, and can be coupled with the development of apps or interactive websites which shareholders could use to submit questions or participate in voting. What makes virtual meeting technology so powerful is organisations can pick and choose the elements which are going to work best for achieving their individual goals and increase engagement with their investors.