Company AGMs: Dos and don'ts

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#1
This is timely, although I had actually written a post on this quite some time back on my (now defunct) blog!

There should be one additional advice - don't rush for the food as if you hadn't eaten for a week! Tongue

The Straits Times
Apr 22, 2012
Company AGMs: Dos and don'ts

Investors should come prepared, so that they can ask informed questions

By Jonathan Kwok

It is the time of the year again when hundreds of investors make a beeline for the swankiest hotels or far-flung industrial premises to attend the annual general meetings (AGMs) of companies.

Clutching their annual reports, these shareholders hope to glean some insights from the head honchos whom they will probably be able to meet only once a year.

In the United States, investors ballot to attend the AGM. They queue for hours to attend Berkshire Hathaway's AGM to hear from billionaire investor Warren Buffett.

While Singapore doesn't have Mr Buffett, we have our own respected versions in the likes of United Overseas Bank's Mr Wee Cho Yaw or CapitaLand's Mr Liew Mun Leong.

Another draw could be the sumptuous buffet spread typically provided for shareholders after the one- to two-hour meetings.

'It's not surprising to see that retail investors are taking a more active role,' said Professor Jeremy Goh, director of the Centre for Corporate and Investor Responsibility at Singapore Management University's Sim Kee Boon Institute for Financial Economics. 'Retail investors are definitely getting more financially savvy.'

Mr David Gerald, president of the Securities Investors Association (Singapore), noted that under the law, a shareholder has the right to participate and vote at general meetings, regardless of the number of shares held in the company.

The shareholder has the right to appoint up to two proxies to attend on his or her behalf, and to be informed of the agenda of the meeting in advance.

The shareholder can also ask to view the minutes after the meeting.

How to prepare

Mr Gerald said that shareholders should familiarise themselves with the meeting's agenda and read relevant materials like the annual reports, circulars and recent company announcements. These documents are available on the Singapore Exchange website or the company's website. This will enable informed questions to be formulated and asked at the appropriate time during the meeting, he added.

Shareholders should arrive early. The chairman of the meeting is not obliged to wait for all shareholders to arrive before starting.

At the meeting

AGMs typically start with company executives giving a presentation of the firm's performance over the past year, and providing updates on business activities. After that, it is open to questions from the floor.

Mr Gerald said that investors should ask about business activities, company financials and the firm's future plans, and query the performance of directors and senior management.

He reminded shareholders to observe decorum when asking questions, so that the meeting can be effective. For instance, investors should put up their hands to ask for permission to speak, and introduce themselves by stating their names before making comments or asking questions.

Investors should not be antagonistic or insulting, and should keep their comments or questions short to enable other shareholders to have a chance to speak.

After the question-and-answer session, investors will be asked to vote on the resolutions of the meeting, which may include administrative issues like the re-appointment of directors and the approval of accounts.

Following the release of the voting results, the meeting usually ends, and investors can adjourn for food and refreshments.

Interested shareholders can stay behind to mingle with executives to clarify any doubts that were not addressed during the question-and-answer session.

'That's the main draw for me, to meet the management and find out more,' said remisier Alan Goh, 40, who attends such meetings regularly. 'We get to ask questions and talk to them once a year. Usually they are alert that shareholders want to talk to them, and they will talk to you.'

Many investors say they leave AGMs with a better understanding of the company, or at least a higher level of comfort, having met the management face-to-face.

Company chiefs say they try their best to answer queries and allay concerns at such meetings.

'It's a duty to meet shareholders once you list the company,' said Mr Kenny Yap, executive chairman of locally listed Qian Hu Corp.

Some bugbears

While many investors are keen to attend AGMs, some face problems in doing so.

With many companies holding meetings within the same time period, and with venues scattered all across the island, investors may have to skip meetings which clash.

Another bugbear is that meetings are typically held during office hours on weekdays. This means that working adults will find it hard to attend them.

'If they are on weekends, I'll go. But because they are on weekdays and during working hours, it's not worth it to take leave just for those one to two hours,' said Madam Cristina Tan, who is in her early 50s and works in a legal firm.

She likes attending AGMs to find out what other shareholders have in mind, and because good questions are often raised by them.

Prof Goh from Singapore Management University said: ''It will be nice, if their schedule permits and if it's not too much of a hassle... for companies to hold their AGMs in the evening or over the weekend.'

jonkwok@sph.com.sg
My Value Investing Blog: http://sgmusicwhiz.blogspot.com/
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#2
I believe the main culprits who r rushing for the food, ie. the uncles n/or their proxies (the aunties), have a much lower probability of been found reading this forum?
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#3
Managed to attend an AGM last week.

(22-04-2012, 09:29 AM)Musicwhiz Wrote: There should be one additional advice - don't rush for the food as if you hadn't eaten for a week! Tongue
Fortunately they issued a coupon on arrival for collecting a bento box at end of proceedings, in a nice carrier, so can take away to makan elsewhere more comfortable. No "hungry ghost festival" this time.

Quote:Investors should come prepared, so that they can ask informed questions
.
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'Retail investors are definitely getting more financially savvy.'
Pleasantly surprised that all questions asked were well prepared and very incisive. No stern and petty nitpicking on grammatical or spelling errors like before.

Quote:The shareholder can also ask to view the minutes after the meeting.
Didn't know this. SGX should make it mandatory to publish in the company announcements website.

1 more thing. Last time, a late attendee turned up and sat beside me. I recognised him as I had seen his picture regularly in the ST as a "professional" attendee who always ask a lot of questions, not necessarily meaningful. This chap really stinks very badly! Fortunately didn't see him this time.

Things are improving.
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#4
Well, so far which is the best AGM Buffets around ??Huh

The very last time, I attended SMRT, the buffet is a lot, but not so delicious.Sleepy

I read in the newspapers......,
Noble Group served like Annual and Dinner type of dishes.Big Grin
HongLeong Group like serve coffee and tea only.

Of course with good dividends, and capital appreciation, one can pamper himself with his favourite food.Big Grin
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#5
I have been attending AGMs for a few years already, swakoo is right in saying about this spelling and words too small questions that seems to be asked by one uncle. This year I did not see him. That's why no such questions are asked. Somehow I feel that these silly questions did not add value to the AGMs at all. In SembCorp AGM last year, one uncle even spoke angrily about something not related to the Annual Report.

Then comes the lunch time where a lot of the uncles and aunties go and snatch the foods. They do not queue up orderly especially when it is a buffett style. It just makes me wonder if these uncles and aunties are attending the AGM to understand more about the business or simply to eat free food. Looks more like the latter to me. Some companies like SPH, CMA gives Bento set which I think is better but unfortunately not all companies practise that. KepCorp AGM is the worse when it comes to eating. I was there and there is this strange uncle who took so much food that I think he can share with his neighbours liao.

I thought food should be secondary in AGMs. I don't mind simple foods, like that of Venture Corp. More importantly, one should be there to question the management on their business or income statements.
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#6
this is one attractive point of illiquid companies with low number of shareholders. Not likely to have as much disturbance.

Found one good guide by SGX on AGM


Attached Files
.pdf   Preparing_AGM.pdf (Size: 126.56 KB / Downloads: 37)
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#7
It is inevitable for AGMs to have silly questions and uncles & aunties snatching for food. I think it's a common feature for every AGMs and I believe there is nothing to be done except for better investor education.

My main focus/essence in my questions: getting to know more about the business.

Very often, people asked forward-looking questions - i.e will dividend be higher next year? will the company be doing better next year? or ridiculous question such as - i.e. why directors' pay so high? why not freehold land? First off, forward looking questions are unreliable. This is so because management are not fortune-tellers and they do no wish to prop up uneccessary optimism. Even if they say that the future is good, it is just an amplification of 'animal spirit' and doesn't serve to be a good convincing factor for investment. In fact, you should be more wary of such statements! As much as uncles & aunties are guilty of asking stupid questions, we are guilty of seeking for unreliable forward-looking answers.

Instead, I feel it is better to ask questions which can provide insight to a better understanding of the business. Why have inventories increased? Was it just a timing issue or was it because of selling problems? Why did AR increased? Was it due to longer credit terms being given? (yes = warning sign of poor bargaining power i.e. Eratat) Who are your customers? (Public sector tend to take longer time to pay)

Though AGM is a good alternative to meet management but I think the frequency of it is too short and even meeting 'proxy companies' may only provide little benefits. I still think having a one-to-one call with the management is the best alternative.
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#8
[Image: ST_IMAGES_EYGENTINGe.jpg]

Wonder if they really own the shares or are there as proxy? So uncles and aunties as proxies? Really? Rolleyes
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#9
One uncle I met in AGM told me he only buy one or two lot s, and as many companies as possible so that he can attend the AGMs to pass time.
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#10
Most of the time I don't get to eat the buffet and if i do it is those leftovers of louzy food that nobody wants. rushing and piling on piles is not as bad as those that "ta pau" the food even before everyone gets to eat...disgusting. I think companies should stop serving buffets in order not to propagate bad habits of people.just serve drinks and if they really want to by the insistence of shareholders then give them package food. other peeves that irritates me , 1 shareholder said company is doing well and can company make some souvernirs for them for attending agms. i rather have more dividends. other silly request. they want bus transport from nearest mrt to fetch them to meeting.

there was 1 time many years ago that other shareholders has to shout down 1 sutpid shareholder to keep quiet who keep on asking silly questions and trying to act too smart.

the list goes on....
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