Over the past five years, retail investing in South Africa has seen significant growth, driven by improved access to financial education and investment opportunities. However, this growth has also highlighted the need for effective annual general meetings (AGMs) that enable meaningful engagement between companies and their shareholders. Despite the rise of virtual AGMs, investors still face obstacles in engaging with company leadership and exercising their ownership rights.
The challenge lies not in whether AGMs should be virtual or physical, but in ensuring they fulfil their core purpose of facilitating engagement between companies and shareholders. Governance practices must reflect modern share ownership realities while maintaining transparency, accountability, and shareholder participation. JSE Investor Services (JIS), a leading provider of shareholder and investor services, manages over 2.5 million shareholder records, providing unique insight into AGM processes.
Governance standards for shareholder meetings are set out in the Companies Act, which requires that AGM digital platforms be reasonably accessible for electronic participation. An effective AGM requires several components, including access, clear joining instructions, voting procedures, and proxy information. However, access is not just a link to a platform; it is the ability to support participation through multiple channels and make the process understandable for everyone.
Best practice requires that online participants have the same opportunity for engagement as in-person participants, including interacting freely with board members and asking questions. Moderation that filters difficult questions or paraphrases them compromises the meeting's governance purpose. Boards should expect tough questions and be prepared to answer them, and there needs to be accountability through voting integrity.
An effective AGM requires accurate registers, reliable proxy processing, and a clear audit trail of voting activity. Administrative friction can hinder beneficial owners from exercising their rights, and drawing on its expertise, JIS administers the formal AGM voting process, protecting the integrity of every vote. This ensures that outcomes reflect the will of shareholders rather than being a symbolic exercise.
Records and transcripts of AGM proceedings are necessary to support transparent decision-making, allowing shareholders to see voting outcomes, understand how significant questions were addressed, and know whether unanswered questions will receive a response. JIS, in association with The Meeting Specialists (TMS), helps ensure that meeting outcomes are formally documented and communicated.
A market that wants greater participation cannot focus only on the trading moment; it must consider whether shareholders understand their rights, have access to information, and can participate meaningfully in decisions that affect the companies they own. Companies that get this right do not see the AGM as a minimum-compliance exercise but as a signal to shareholders that their participation is recognised and valued.
Key points
- Effective AGMs require more than just accessibility; they need to enable meaningful engagement between companies and shareholders.
- Governance practices must reflect modern share ownership realities while maintaining transparency, accountability, and shareholder participation.
- Best practice requires that online participants have the same opportunity for engagement as in-person participants.
