Online AGMs look for vote of confidence from shareholders
Shortly after the full force of Covid-19 hit Europe and the US in March 2020, western companies faced a tricky decision on what to do about their annual shareholder meetings. Within weeks, hundreds of AGMs had been postponed because of the pandemic.
Johan Aronsson, a Swedish banker who had just finished his latest job for lender SEB, thought there must be a better solution than simply calling off the meetings. Out of this was born Legimeet, a start-up that organises digital AGMs with everything from online voting to real-time question-and-answer sessions, allowing shareholders to join in from home or work.
“Every day, I saw in the papers that they postponed all the shareholder meetings. Why would they do this when they could do it digitally so easily?” Aronsson asks in an interview.
Sverre Linton, chief lawyer at Aktiespararna, the Swedish shareholders’ association, says the retail investors he represents have long been asking for digital options, as AGMs invariably take place during the working day at locations far from where many potential participants are based. He argues that it is a “matter of democracy” to ensure shareholders can attend meetings — and he says Legimeet’s solution seems “very good”.
“It’s even more difficult if you are not working and living in Stockholm, Gothenburg or Malmo, where most of the [Swedish] AGMs are held,” he says. “But if you can attend digitally you can perhaps log off from work for an hour to ask your questions and cast your votes.”
Legimeet is still tiny — though is raising capital to expand abroad and improve its processes — and it is far from certain that digital AGMs will continue as the pandemic abates. However, the company has clearly used technology to seize an opportunity during the pandemic to improve life for shareholders.
Starting Legimeet was far from straightforward. Aronsson contacted a friend who worked for a digital events agency, Twebcast, but they could not help because “everybody wanted a digital event”.
But a month later, with Twebcast as a shareholder, Legimeet was launched, built on the Twebcast platform but with some of its own functions. It enables shareholders to register for an AGM, watch it, question executives and directors, and vote in real time, whereas on many rival platforms there are delays in questions appearing on screen, which makes dialogue tricky.
Legimeet organised its first AGM in June 2020, though to date it has organised only 15, including just one for a listed company, Sweden’s Gigger Group, which invests in software start-ups. Legimeet handled everything for Gigger, from postal voting and shareholder registration to the meeting itself and delivering the voter logs. It has developed its technology from a bare-bones offering to one that enables, for example, qualified majority voting — an important issue in Sweden because of different voting classes — and separate breakout areas for board directors.
Legimeet’s starting fee is SKr49,000 ($5,700) per meeting but most cost between SKr200,000 and SKr500,000, depending on the broadcast studio used and how many services are added. Legimeet is hoping to automate many of its processes. “We’ve done lots of things, but we’re still a small company,” Aronsson says.
One big question hanging over Legimeet is whether companies will revert to purely physical AGMs as the pandemic eases. Aronsson says he believes most will employ a hybrid approach where a few shareholders meet up physically and the remainder attend digitally. Linton at Aktiespararna agrees. “We hope this will be the new normal, since it’s the best way for as many shareholders as possible to participate,” he says.
Linton argues that providing a digital option will be crucial in attracting the younger generation of shareholders to attend AGMs, “since they are used to doing almost everything digitally”. But he stresses that most AGM attendees remain older people who are not digitally savvy, so it is important that technology also upholds their shareholder rights.
Legimeet works well in a hybrid setting, says Aronsson, with both postal votes and people in the room raising their hands. The business is not only targeting listed companies but is also seeing growth in arranging meetings for large organisations such as Stockholm’s main taxi operator and local government. Among the attractions of video meetings for the latter are the potential cost savings and the opportunity for geographically dispersed participants to be involved.
Aronsson argues that the pandemic has shown how easy video meetings are, but he concedes that AGMs involving only postal votes have worked too — a potential threat to his business model. “Today, the only people who can go to shareholder meetings are the ones who don’t have a job — they go for a sandwich. You can’t take half a day off to go to one, so we include a lot more people and we make it easier for institutions. Therefore, I think we’ll see a shift, but it’s just a guess,” he adds.