Company bosses beware. If a shareholder grabs a selfie at your annual meeting this year they may well be from activist group ShareAction.
The charity owns a share in every FTSE 100 company, enabling activists to turn up at AGMs and raise subjects from boardroom pay to climate change – and getting a shot with the chief executive is just one way of getting their protests noticed.
It is advice like this that ShareAction handed out at an activists’ bootcamp last month and with this year’s annual meeting season about to get underway, Catherine Howarth, chief executive of ShareAction, is running a series of sessions.
Company meetings are “an opportunity to put the issues on the agenda of the entire board of directors,” she tells her audience. “You open the door for further dialogue”.
To illustrate the power of the well placed question she recalls the annual meeting of HSBC back in 2003.
That is when Abdul Durrant, an “invisible night cleaner” stood up and asked the then chairman Sir John Bond if the bank would pay the living wage.
It caused even more of stir coming just after Bond had had to defend a $37m (£24m) pay deal for new board member, William Aldinger III.
Although it took place before ShareAction was set up, under the name FairPensions, a decade ago, it marked a moment in shareholder activism and motivated Howarth.
“When Aldinger moved on to the HSBC board his pay package included £18,000 a year for dental care – which was more than cleaning staff were getting on the minimum wage. It was very powerful,” she said.
It shows the publicity – and potential results – that activists can grasp on the one occasion a year when boardroom bosses, from the chief executive to the part-time non-executive, must face their shareholders to be elected to the board, have their strategies endorsed and their pay deals approved.
ShareAction is likely to be at around 80 annual meetings this year, including those held by some of the biggest British companies, including BP, in April where Howarth was involved in tabling a resolution to improve transparency on climate change exposure that has been backed by the board.
HSBC’s meeting in May is likely to be a particularly bad-tempered event after the revelations about the tax avoidance activities in its Swiss private bank.
The aim of the training sessions is to better equip debut AGM attendees to ask questions that will elicit a clear reply and the best possible publicity for their cause.
As attendees introduce themselves at the session, they list a diverse range of interests – from access for disabled people, zero hours contracts and surveillance issues to the perenially thorny topic of soaring executive pay.
They are asked to draw up their questions for a mock board of directors. One activist, Susan Cook, proceeds to skewer the imaginary board of a fashion retailer about the problems disabled people face in getting acces to the lifts in its stores. Sitting in her wheelchair, she gets her point across the more forcefuly when she points out the shop she could not get into was the flagship store on London’s Oxford Street.
It is the turn of former City fund manger Anne-Marie Williams, who asks an imaginary board of directors at Sports Direct about zero hours contracts. Williams is now volunteering for ShareAction. Next Jenny Luckett, policy and communications officer at Generation Rent, challenges a make believe board of estate agents about fees charged to renters.
David Weeks, playing the role of the chairman of the imaginary companies, tells everyone that annual meetings are not just just good for publicity, but also an unrivalled opportunity to network with the board. “The board has to use it as a damage limitation exercise ...[You’ve] got an opportunity to get on the map,” said Weeks. But hang around the lunch and shareholders can reiterate their point in private too.
Weeks, who is on the committee of the Association of Member Nominated Trustees – the pensions governance support group – has begun attending company AGMs because he thinks trustees should take a much greater interest in how votes are cast.
While AGMs are the one time a year when boardroom bosses must face their shareholders in public, they will have met their biggest investors on numerous occasions behind closed doors. The attendeesby contrast are often individual investors with a small number of shares and their actual votes on resolutions count for little when the powerful City investors have already cast theirs by proxy.
Howarth warned the training session that quite often “there is a range of quite angry questions on pay, followed by a vote in which 95% of shareholders approve pay. That’s because all the really big institutional investors, who are rarely in the room [have already cast their votes in favour]”.
Even so, smaller investors can get their voices heard by speaking at the meeting, while Howarth said she talks to big City investors to try to win their backing for the key points on the agenda of activists.
She listed agms where ShareAction has helped shareholders to speak out: at Sainsbury’s, for instance, over its advertising in the Sun despite its page three topless models; at Greggs, where campaigners asked about the welfare of the animals used to make the baker’s famous sausage rolls.
For would-be agm protesters, her tip sheet contains five points: keep the question short; use an appropriate tone (polite not hectoring); frame your question by turning the company’s own words against them; know your audience; and lastly have a “clear ask” – that requires a firm commitment or a yes or no answer.
“It is really important to read the mood in the room,” Howarth says. Write down the question to read it out. “You don’t want to dry up”.
Her colleague Jamie Audsley adds a last piece of advice: keep hold of the microphone. “In a respectful way you can get into a dialogue. You need to keep the audience on your side”.
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