How much do you like an event where the first seventy to ninety minutes of texts that you already know are read aloud? Mind you, no reading with works by Goethe, Schiller or Heinz Erhardt. It is about the general meetings of German stock corporations. Dozens of companies are sticking to purely digital meetings even after Corona and see it as progress to publish the speeches last week, which will be read out this week, for example, by Christian Sewing at Deutsche Bank or Theodor Weimer at Deutsche Börse.
The arc of suspense then consists of reading along to see if individual words have changed. It is sold as an advantage for shareholders to be able to think days about questions that are to be submitted in writing before the general meeting. At the Annual General Meeting, the answers, written in the most beautiful legal German, are then read aloud. Inquiries are only partially possible.
The general meetings in this country have degenerated into a formal legal treatment of annoying duties. The comparison with a notary's appointment comes to mind. The added value for shareholders is close to zero. This undesirable development on the German capital market is not new, it already existed before Corona, but since then it has intensified again with the purely digital formats. Even before Corona, 80 percent of shareholders at some companies said that food and drink were the most important thing to them at the meeting. And they complained if the catering didn't start during the CEO's speech. Motto: What do I care about the chatter, I want my free food.
Greatest possible distance to shareholders
The purely digital formats now keep shareholders at the greatest possible distance. Interjections, lively debates are not possible. Also, due to a lack of applause or boos, no mood can be captured. Many board members and supervisory boards are quite happy with this. Annoying inquiries can be shaken off. Technical hurdles prevent some direct disputes, especially since at least one in two digital Annual General Meetings reports that technical problems caused longer interruptions.
The devaluation of the Annual General Meeting is a pity in several respects. It should be a celebration for the shareholders. The companies are in regular contact with the largest owners. But only the Annual General Meeting can provide a broad picture of the situation. It should be the place where shareholders, as owners, are free to express their opinions to their management without being suffocated in formalisms.
If some companies now switch to neither reading out previously submitted questions nor making the answers public, interesting information will be lost. A proven expert on the Annual General Meeting such as Ingo Speich, capital market expert at the fund company Deka, reports on "light years difference in information content" between face-to-face meetings and digital events. This year, Deutsche Telekom impressed with information booths and the entire Board of Management and Supervisory Board took part in the critical debate with the shareholders.
Hybrid assembly as the gold standard
The German Association for the Protection of Securities Ownership points out the fact that in France almost all general meetings were held in person again as early as 2022, while in Spain the hybrid format predominates – i.e. a face-to-face meeting with the possibility of connecting online. This is also practiced in Great Britain.
This is considered by experts to be the gold standard for shareholders, as it combines the dynamism and authenticity of an event with real people in a large hall with the advantages of digital, such as saving travel expenses and attending several AGMs in one day. This Tuesday and Wednesday, dozens of events took place in parallel in Germany.
Shareholders should insist that their companies give them the opportunity to be present again. And we should look abroad and especially at America. There, the formal legal aspects of the meeting are dealt with in a few minutes, and then there can be a free debate and not, as in Germany, under the constant fear of lawsuits for annulment. The highlight this year was certainly the six-hour event with Warren Buffett (92) in Omaha. More than 20,000 local shareholders are glued to his lips. However, the legendary investor does not read out any well-known texts either.