One of the frustrations for private shareholders at the annual general meetings (AGMs) of publicly listed companies is that, however they might vote, they know that it won’t make much difference. The outcome will be determined by institutional shareholders whose stakes dominate the share registers, certainly in large companies, although less so in small ones. So, is it worth bothering to vote, let alone going to an AGM?
Institutions will typically vote in advance. That sets the minds of company secretaries at rest. When the day comes, they can sit snugly through the meeting knowing that the resolutions will be carried. To be precise, it’s the fund managers of institutions who vote, the institutions being investment trusts and open-ended investment companies (Oeics, or mutual funds in the US); also hedge funds and foundations for non-profit organisations such as universities. What difference can the relatively tiny shareholdings of private investors make?
There’s been a long-running national debate about how many shares private investors, or for that matter, employees, actually own. Most, such as those held in individual savings accounts (Isas), are held (and owned) in nominee accounts by institutions, in this case the platform providers. That makes their true ownership hard to track. The provider is like a trust, and unless the company tries to identify the beneficial owners (a laborious process) it will be unaware of who they are – so won’t notify them about the AGM.