BoD’s Autonomy and preferred AGM Types
Trend observations from 120 Annual General Meetings
Around 120 general meetings have now been held via Konsento, and around a third of these involved resolutions that were notarised online by a notary. Based on this experience, we have compiled observations that we are presenting in a three-part blog series. We will be highlighting trends that influence the success of the public limited company beyond the AGM in some cases. Each blog is dedicated to a specific group of topics and offers valuable insights and tips for planning and organising general meetings.
In this blog, we show that there are boards of directors who want to organise their general meetings independently and autonomously, as well as those who delegate or outsource as many of the associated tasks as possible. Moreover, we shed light on which type of GM is best suited to which conditions.
Autonomy through sophisticated software
A notable trend in general meetings is the growing desire of boards of directors to organise and conduct general meetings and board meetings independently. It is obvious that an experienced board of directors has the expertise to organise a standard AGM or a standard board meeting independently. However, younger board members also appreciate being able to convene a general meeting without the support of external experts. The same applies to proposals that are not on the agenda every year, such as the introduction of a capital band or a change of registered office. Many general meetings held via Konsento take place without the direct support of external specialists. This shows that the application also enables inexperienced board members to organise a general meeting independently. Konsento offers sophisticated software, guided processes and embedded legal expertise to support this autonomy.
Support from experts
At the same time, there are still companies that have the necessary size and wish to delegate or outsource numerous tasks in connection with the Annual General Meeting. Konsento offers various services to meet these needs. These include the preparation of a commercial register application, the appointment of a notary and quality control prior to sending out invitations. In addition, relevant functions such as independent proxy or minute taker can be booked directly with or via Konsento.
Distribution and suitability of the different GM types
The distribution of the 2024 general meetings held via Konsento to date shows a clear picture of current trends and preferences. Virtual general meetings account for 50% of all general meetings held via Konsento. Hybrid general meetings follow with 37%, while physical general meetings only account for 13%. On the one hand, the distribution of AGM forms is certainly due to Konsento's customer structure, which consists mostly of growth companies, unlisted SMEs and crowd-financed stock corporations and only to a lesser extent of listed SMEs. Nevertheless, it is becoming clear which type of AGM is particularly suitable in which situation, which has led in particular to the high number of virtual general meetings via Konsento. However, we can state straight away that none of the AGM types is particularly suitable or unsuitable due to the age structure of the shareholders. Our observations show that stock corporations with the more typical investors "at their best age" organise virtual general meetings with the same high participation rate as stock corporations with younger shareholders.
Virtual general meetings
Virtual general meetings are particularly suitable for extraordinary general meetings, for example to increase the share capital or for other amendments to the articles of association. This is particularly true if the notary can participate online and carry out the notarisation remotely, which saves costs. At such general meetings, the focus is on fulfilling the legal requirements for implementing the company's transformation and development, not on presenting the company or retaining shareholders. The fact that 50% of general meetings are held virtually on Konsento is due to the fact that Konsento specialises in the standardisation of digital capital increases.
Virtual general meetings are also particularly suitable for a geographically diversified shareholder base or team, especially on the Board of Directors. They also offer the opportunity for "working nomads" to take part in the Annual General Meeting and help to avoid traveling. In this respect, they contribute to the implementation of the ESG strategy of the public limited company. They are also very well suited to saving costs for space and logistics.
Hybrid general meetings
Hybrid Annual General Meetings basically offer the same advantages as virtual Annual General Meetings, but also create the opportunity for shareholders from the region to attend in person and exchange ideas with the Board of Directors after the Annual General Meeting. Conversely, they offer all the advantages of the physical Annual General Meeting, but also allow shareholders who are geographically further away to actively participate in real time. This enables shareholders who are not from the region to participate without great effort. Shareholders appreciate this with regularly high participation rates.
In addition, hybrid general meetings are of course a good option for stock corporations that want to enable their shareholders to participate online but do not (yet) have the statutory basis for virtual meetings.
Physical General Meetings with venue
Physical General Meetings are particularly suitable if the Board of Directors wishes to make personal contact with individual shareholders after the General Meeting or would like to offer shareholders this opportunity.
They are also suitable for stock corporations that have not yet included the option of virtual general meetings in their articles of association, but are currently still wary of the challenges of a hybrid meeting using analogue and electronic communication channels.
Review and context
The previous blogs in this series dealt with the Annual General Meeting as a marketing platform and the growing need for data analysis.This blog has explored the balance between autonomy and delegation of AGM preparation work. Together, these three blogs provide a comprehensive overview of current trends and best practices in general meetings.
We would be happy to present our innovative AGM tool in more detail during a non-binding demo appointment. .
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