Marks & Spencer (M&S) has hit back at a top shareholder group today after it claimed the company was restricting the voice of investors by holding a “digital first” annual meeting for a second year running.
In an article on LinkedIn, retail investment group The Engagement Appeal accused the FTSE 100 retailer of hampering investor engagement with bosses by shifting to a primarily online format for the meeting, held this morning.
The criticism comes after M&S was plunged into a major spat with shareholders last year when it adopted an online-only format for the annual get-together, a move investors claimed was preventing them from properly holding the company to account.
Writing today, Sherly Cuisia, The Engagement Appeal’s founder, claimed the company had still not gone far enough in opening up access to the event despite giving shareholders the option to attend in-person this year.
“M&S AGMs used to bring together up to 700 shareholders. Why they wouldn’t continue this amazing tradition and grow it every year both in-person and online, I cannot understand,” wrote Cuisia. “Think Warren Buffett. Berkshire Hathaway’s AGMs every year attracts and accommodates 70,000 to 80,000 loyal shareholders in person.”
Last year’s move to adopt a primarily digital meeting triggered a backlash just as the firm’s chair, Archie Norman, fronted a ‘Share Your Voice’ campaign to put shareholder engagement back on the agenda for British boardrooms.
While M&S has softened its approach and said if a “shareholder wishes to attend in person, there will be seats available at our Support Centre”, it has retained a “digital first” format, the Engagement Appeal said.
However, a spokesperson for M&S roundly dismissed the calls and said investors have been given the option to attend as they see fit.
“This is nonsense. Shareholders are attending today in person and we absolutely are not ‘shutting out shareholders’,” a spokesperson for the firm said in response to a question from City A.M.
The furore underscores growing concern among shareholder groups that they are being prevented from properly scrutinising boards by digital AGMs, which often force investors to submit questions to boards via a mediator.
During the pandemic, firms across London were forced to shift their annual meeting online but many have now stuck with the format or adopted hybrid meetings, in which investors can dial in remotely or attend in person.
In a letter to the government last year as part of the Share Your Voice campaign, Norman raised concerns over the fact that company law had not kept up with the digital format and called for online AGMs to be deemed ‘legitimate meetings’, as well as pushing for an “increased two-way dialogue between companies and shareholders”.
“In the 1980s, the government pursued a concerted programme to promote popular participation in capitalism and the enterprise economy; people were encouraged to ‘Tell Sid’ about the virtues of shareholding, creating a nation of investors,” he wrote.
“Today, however, that level of shareholder capitalism would not be possible. The current outdated legislation means that ordinary people who have invested in the UK’s listed businesses struggle to hear from and communicate with them.”