Never Mind The Ballots

We’ve written in the past about the some companies see quite sharp shifts in voting turnout. While Covid-19 has wreaked havoc with AGMs in general attention has understandably been elsewhere. But we’re still seeing some cranky voting results.
Take the Lookers PLC meeting this week. Turnout at Monday’s meeting was not far short of 63%. But in 2019 it was 79%, meaning turnout fell by a fifth. So substantially less shareholders were motivated to vote despite major board changes, a delay to the publication of accounts and the identification of ’potentially fraudulent transactions’ in one division. Perhaps it’s because investors are waiting for the second ’accounts’ meeting, but it seems odd to not at least vote on the re-election of board members who have been in place during the company’s recent difficulties.
Or look at Premier Oil, whose shares have halved in value since the start of the year. Turnout at its AGM last week was just over 37%, having been over 50% in 2019, so a reduction of a quarter. Also in the oil sector, Royal Dutch Shell saw its turnout fall by 16% to 51% at this year’s AGM, a meeting where there was a shareholder resolution requesting greater disclosure around emissions targets.
Or what about John Menzies, a company caught up in the maelstrom in the aviation industry and whose chief executive is bailing out. Turnout at its AGM last month was 66%, or 17% down on its 2019 AGM.
When we see this kind of volatility in turnout in political elections we can expect hand-wringing editorials. But when it happens in the private sector it passes largely without comment, even when major multinationals like Shell are involved. There’s now a requirement on UK companies to issue to respond to votes of 20% or above against them. Perhaps there should be a similar requirement to make a statement when they experience significant drops in turnout (say a reduction of over 10% on the previous year).
To be clear, the question of why this is happening will ultimately land back with shareholders who aren’t voting, but some corporate reporting would at least make sure it gets asked.

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