Archie Norman’s first attempt, a year ago, to reinvent the annual shareholder meeting for the digital age suffered from an enormous error. In designing the event as digital-only – in other words, in telling shareholders not to turn up in person and to tune in online instead – the chair of Marks & Spencer abused the well-established principle that even small investors in a listed company must have the right, once a year, to buttonhole the bosses in the flesh. Directors cannot expect to live virtually; the pandemic is over.
His second effort on Tuesday was vastly improved because it was a genuine hybrid event. Shareholders were free to ignore M&S’s odd advice that they would get “the best experience” by joining online, and 100-plus individuals were in the room at the company’s headquarters in Paddington, west London. The point, let’s hope, has been made: leave it up to the punters to decide how they wish to participate, which is how M&S behaves in its day job as an “omnichannel” retailer.
Yet Norman’s push for greater digital access is correct at its core. To catch the attention of private shareholders – folk who everybody says are vital to the task of reviving interest in public markets – there must be a video component in the age of Zoom and Teams. Not everybody lives in London, where most meetings happen. M&S’s online audience was many times greater than the one in the building.
One cannot say the investors were treated to scintillating content, of course. The main mini-revelation in the Q&A was that the company had an astonishing 50,000 ex-employees with discount cards entitling them to 20%-off for life before the chief executive, Stuart Machin, decided the policy was absurdly generous and moved the qualifying employment period from 10 years to 25.
But shareholders did get to press Norman on his cautious approach to dividends, which seemed to be their main grumble. And he and Machin were obliged to explain why M&S won’t guarantee to pay its contractors, as opposed to its staff, the real living wage. That is worth doing in a public forum.
Broadly speaking, the hybrid format worked. It is possible to quibble with the use of a “shareholder advocate”, in the form of broadcaster Anita Anand, to select the online questions, but a managed process does allow more ground to be covered. And an outsider is arguably better placed than the chair to cut off verbose questioners or the offensive variety (recall the appalling misogynistic comments at Aviva’s meeting a couple of years ago).
Other companies should take note. Attendances at annual company meetings have been in decline for years. Most boardrooms give the impression they wish the events didn’t exist, whether out of fear of protesters or because they regard small investors as irrelevant. Norman is at least trying to stir interest and “stand up for the small shareholder”, which should be applauded.
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A few big-name investment trusts, such as Fundsmith and Scottish Mortgage, attract healthy audiences of interested investors who ask sharp questions. There is no reason why regular companies shouldn’t aim for the same thing. It would show a certain basic acceptance of the advantage of openness. More shareholders should attend, whether virtually or in person. More companies should make it worth their while.