Strategic Insights

A Turn of E-vents: The Digital transformation of AGMs

The report looks in detail at the digital transformation of annual general meetings (“AGMs”) amid the global pandemic. In addition, the report explores how hybrid AGMs optimise reach and engagement and how digital AGM solutions can support the process.
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Sound corporate governance lies at the heart of long-term, sustainable growth. Annual general meetings (“AGMs”) represent a key pillar in this equation, providing a formal channel in which shareholders can evaluate a company’s performance and leadership team.

Recognising their importance in supporting corporate governance, many jurisdictions mandate organisations to hold AGMs. We estimate that 11.9 million AGMs were held worldwide in 2020 by corporations (both public and private) and non-profit organisations at a total cost of USD 9.3 billion.

Despite their long history, AGMs have largely remained unchanged, with physical, in-person conventions the dominant format until 2020. However, the arrival of Covid-19 highlighted a number of pain points associated with physical AGMs, including: (1) organisation logistics; (2) voting efficiency; (3) records management; (4) meeting expense; (5) shareholder participation; and (6) paper waste. We believe many of these shortfalls can be addressed via digitalisation, and AGMs – like many business meetings in today’s socially distanced world – are being moved online.

Digital AGMs (i.e. AGMs enabled via digital means) appear to be gaining growing attention, including both virtual and hybrid events, given their capacity to eliminate or considerably reduce the challenges experienced by physical, in-person events. This trend was accelerated in 2020 as a result of social distancing measures implemented across the globe due to Covid-19 – including prohibitions on large gatherings – prompting companies across the globe to explore digital AGM solutions, with many jurisdictions witnessing double-digit multiples in digital AGM adoption rates in 2020.

Given this growing demand, many service providers have developed digital AGM solutions that serve as specialised video conferencing applications for AGMs – ranging from solutions offering niche functions to a holistic platform offering end-to-end AGM functionality.
Despite their growing popularity, the pain points associated many with these solutions were laid bare in 2020, reflecting a mix of regulatory restrictions, traditional management mindsets, poor AGM meeting experiences (driving low shareholder engagement levels), and technological limitations. These challenges contributed to digital AGMs being less well- received than expected in 2020.

We see ample scope for digital AGM solutions to address technology-related shortfalls, by developing an integrated system, designing and intuitive platform, and enhancing engagement functions. We believe the global digital AGM solution market has the potential to grow by a CAGR of ~10% over the next five years, reaching ~USD 219 million by 2025, if these solutions are able to fulfil digital AGM needs.

Ultimately, a successful digital AGM needs to exhibit the benefits of digitalisation (especially with regards to access and reach) while retaining the benefits of physical AGMs (particularly with respect to promoting management accountability and shareholder engagement). To this end, we see hybrid events being the dominant AGM format in coming years.
Corporate governance, like most business practices. With digital adoption here to stay, we see this time as a fundamental turn of e-vents for AGMs.

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