2023-05-17 06:19:10
Wow do you like an event where the first seventy to ninety minutes of texts that you are already familiar with are read aloud? Mind you, no readings with works by Goethe, Schiller or Heinz Erhardt. It’s about the general meetings of German stock corporations. Dozens of companies are sticking to purely digital meetings even after Corona and see it as progress if they published the speeches last week that were read this week by Christian Sewing at Deutsche Bank or Theodor Weimer at Deutsche Börse, for example.
The arc of suspense then consists in reading along whether individual words have changed. It is sold as an advantage for shareholders to be able to think for days about questions that are to be submitted in writing before the general meeting. The answers, written in the most beautiful legal German, are then read out at the Annual General Meeting. Inquiries are only partially possible.
The annual general meetings in this country have degenerated into a formal legal treatment of tiresome duties. The comparison with a notary appointment suggests itself. The added value for shareholders is close to zero. This undesirable development on the German capital market is not new, it existed before Corona, but since then it has worsened again with the purely digital formats. Even before Corona, 80 percent of the shareholders of some companies said that eating and drinking was the most important thing at the meeting. And they complained when the catering hadn’t already started during the CEO’s speech. Motto: What do I care about the gossip, I want my free meal.
Greatest possible distance to shareholders
The purely digital formats are now keeping the shareholders at the greatest possible distance. Interjections and lively debates are not possible. Also, due to the lack of applause or boos, no mood can be captured. That is quite right for many board members and supervisory boards. Annoying questions can be shaken off. Technical hurdles prevent some direct disputes, especially since at least every second digital general meeting reports that technical problems caused longer interruptions.
The devaluation of the annual general meeting is a pity in several respects. It should be a celebration for the shareholders. The companies are in regular contact with the largest owners. But only the annual general meeting can provide a broad picture of the situation. It should be the place where shareholders, as owners, are free to express their opinions to their management without allowing themselves to be stifled by formalism.
Interesting information is lost when some companies choose not to read out previously submitted questions or make the answers public. A proven general meeting expert such as Ingo Speich, capital market specialist at the fund company Deka, reports that there is a “light-year difference in the information content” between face-to-face meetings and digital events. This year, Deutsche Telekom impressed with information stands and the entire Management Board and Supervisory Board took part in the critical debate with the shareholders.
Hybrid assembly as the gold standard
The German Protection Association for Securities Ownership points to the fact that in France almost all general meetings were held in person again by 2022, while in Spain the hybrid format predominates – i.e. a face-to-face meeting with the option of connecting online. This is also practiced in Great Britain.
This is considered by experts to be the gold standard for shareholders, as it combines the dynamism and authenticity of an event with real people in a large hall with the advantages of the digital, such as saving travel expenses and attending several AGMs on one day. Dozens of events took place in parallel in Germany this Tuesday and Wednesday.
Shareholders should insist that their companies give them opportunities to be present again. And the look should be thrown abroad and especially to America. There, the formal legal aspects of the meeting are dealt with in a few minutes, and then debates can be held freely and not, as in Germany, with the constant fear of legal action. The highlight this year was certainly the six-hour event with Warren Buffett (92) in Omaha. More than 20,000 local shareholders are glued to his every word. But the legendary investor doesn’t read any well-known texts either.
#Shareholders #digital #devalued #assembly