An annual general meeting (AGM) is a yearly gathering between the shareholders of a company and its board of directors. Generally, this is the only time that the directors and shareholders will meet throughout the year, so it is a chance for the directors to present the company’s annual report.
AGMs are not just held by companies. For example, universities, schools, charities and unions could all be required to hold an AGM to discuss the future of the organisation or institution in question.
During an AGM, a company’s performance is analysed and its future strategy is discussed. This is an opportunity for shareholders to question the board, get answers for unsatisfactory performance and challenge them on the direction of the company. Equally, an AGM is the time to praise good returns.
Votes can also be held during an AGM, allowing shareholders to vote on company decisions, and fill any vacant positions on the board of directors.
Shareholders who choose not to attend the meeting can normally vote by proxy, which can be done by post or by giving permission for another shareholder to vote on their behalf.
Most companies, whether they are publicly listed or private, must hold an AGM. This is primarily for transparency, but also for shareholders and other interested parties to have a say on company decisions.
The location and format of a company’s AGM is entirely at the company’s discretion, and depends on the resources at its disposal. For example, the AGM of Warren Buffet’s company, Berkshire Hathaway, is colloquially known as ‘Woodstock for Capitalists’. It is held in Omaha, Nebraska – where Berkshire’s headquarters are – and has seen over 10,000 attendants descending on the American city annually.
The AGMs of large companies are often impressive affairs; with large spreads for food and entertainment. In contrast, smaller companies may simply hold their AGMs in their lawyer’s offices. Regardless of how lavish the event is, AGMs can often be quite monotonous due to the large volume of legal and administrative updates to get through.
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