The 2024 AGM season for FTSE 350 companies has concluded, offering valuable insights into shareholder engagement and corporate governance trends. This report, produced by Lexis+® UK Practical Guidance, highlights the significant patterns observed during this period and provides guidance for law firm leaders and in-house legal department leaders as they prepare for the 2025 season.
The 2024 AGM season marked a notable decline in shareholder dissent, reaching its lowest level in seven years. This trend, ongoing since 2021, suggests a shift in shareholder satisfaction and engagement. With 82.3% of AGMs held in physical or physical plus webcast formats, there is a clear preference for in-person meetings post-pandemic. Hybrid meetings saw a decline, while virtual meetings remained constant, with a new format of virtual meetings with restricted physical attendance emerging.
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During the 2024 AGM season, the re-election of directors emerged as the top resolution attracting significant dissent, with 20 resolutions receiving notable no votes. This shift from directors’ remuneration reports, which saw a 66.7% decrease in dissent, indicates a growing focus on board composition, diversity, and director independence. As Will Chalk, Partner at Ashurst, notes, "Improved governance disclosure practices across the FTSE 350, as noted by the FRC, must also be a factor."
Failed resolutions were relatively rare, with only nine companies experiencing at least one failed resolution, a slight decrease from the previous year. The most common types of failed resolutions were related to the disapplication of pre-emption rights and shareholders’ requisitioned resolutions. These failures were spread across various industry sectors, with the Travel, Hospitality, Leisure & Tourism sector seeing the highest number of failed resolutions. Ferrexpo plc, in the Mining, Metals & Extraction sector, experienced the most failed resolutions, highlighting the importance of addressing sector-specific challenges.
The report delves into the reasons for dissenting votes, particularly focusing on resolutions to re-elect directors and disapply pre-emption rights. Concerns over board diversity, director independence, and time commitments were common reasons for dissent against director re-election resolutions. For resolutions to disapply pre-emption rights, dissent was often due to company-specific issues rather than dissatisfaction with the Pre-Emption Group’s increased recommended levels of authority. As Pete Fowler, Chief Operating Officer at Lumi Global, explains, "Companies that fail to embrace this shift are missing out on critical opportunities to engage with their stakeholders in meaningful, efficient ways."
The format of AGMs continues to evolve, with a variety of approaches observed in 2024. Physical AGMs remained the dominant format, but there was a notable presence of hybrid and virtual meetings, reflecting a shift towards greater accessibility and engagement. Hybrid meetings accounted for 15.5% of AGMs, indicating their growing importance as a standard for listed companies. This trend is driven by the need for inclusivity and stakeholder engagement, as highlighted by the increasing adoption of digital technologies.
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Looking ahead to 2025, companies should focus on governance, board diversity, and executive pay. The potential for greater flexibility in AGM formats, including the use of digital technologies, is also a key area of interest. As Wilma Rix, Senior Associate at Linklaters, advises, "Companies will need to consider their own investor base, needs, and circumstances when planning AGMs, rather than solely following market trends." By understanding these trends and adapting to the evolving landscape, legal leaders can ensure successful AGMs and maintain strong shareholder relations.
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