By Terrence N. Chimanya

An Annual General Meeting (AGM/Annual Meeting) is a meeting of the general membership of an organisation. The organisations may be companies or membership associations with shareholders/members. These meetings may be required by law or by the constitution or charters governing the body. The meetings are held to conduct business on behalf of the company/association. Every company/association is required to hold an AGM within 18 months of the date of its incorporation and, thereafter, once a year. AGM minutes must be kept up to date and maintained as part  the companies records.

The main purpose of an AGM is to enable the company/organisation to report to its shareholders/members on its affairs during the past year and to deal with the following matters:

• To place before the meeting, the approved annual financial statements together with the directors’ report and an audit committee report.
• To elect or re-elect directors who may be retiring by rotation.
• To approve, in advance the directors’ fees for the year ahead, if not already approved at a shareholders meeting.
• To appoint the audit committee.
• To appoint auditors to the company for the new financial year and to determine the auditors’ remuneration.
• To deal with any other business required by the memorandum.

At the meeting, Directors are required to openly and honestly share company insights with their shareholders/members about the past year’s business performance, strategies and the outlook, going forward. I have been fortunate enough to have prepared the AGM Pack, arranged and attended AGMs of companies I worked for and those I have invested in. The information I have prepared and gleaned from them has been very useful for my Directors and shareholders as well as for my investment decision-making process. This has led me to higher gains by staying invested in companies whose Executive Management teams I felt were clear and competent on how to bring a company forward in the coming years. Attending AGMs has also helped me pull out of investments whenever I felt the AGM threw up some red flags that I needed to take heed of, saving me money in the process.

Companies/organisations should, therefore, have their AGMs on a regular/annual basis so as to ensure that their shareholders are kept up to date as opposed to them filling gaps of information with the internet and/or media. There are important reasons why potential investors and shareholders should attend AGMs such as meeting and  talking to the company’s insiders (Board Chair, CEO, CFO, Auditors, etc.), getting access to a lot of information not yet written in the annual report, any press release or analyst report which they have as part of the AGM Pack.

During the meeting, shareholders pose questions to the board in front of other shareholders, usually the answers given are more politically correct. Post-meeting is the best time when shareholders can ask more sensitive questions and, Executive Management is sometimes willing to give you candid answers. Directors tend to share more sensitive information about their company face-to-face when it wouldn’t be wise for them to share publicly. By observing their body language and candor (or lack of), one can tell if the directors are being truthful and ultimately aligned with your interests as a shareholder/member.

It is still better to meet and interact with the Executive Management to get a better understanding and appreciation of the company/organisation than not know  the people who are supposed to be growing one’s investment. By attending AGMs, one gets to learn fresh perspectives from other investors and, in the process, one might discover new distinctions that might improve one’s research and analysis as an investor.