What Is An AGM?
An Annual General Meeting or more commonly known by its acronym – AGM, is a mandatory annual (Once a year) gathering of a publicly listed companies directors, executives and most importantly, their shareholders. Basically it’s the time of the year when shareholders can hold the company accountable for their actions.
One of the larger ones would undoubtedly be Berkshire Hathaway Inc.’s (NYSE:BRK.A) AGM or the Woodstock for Capitalists. Over the years, Berkshire has made it’s AGM an experience, for some even a pilgrimage, not only to see the sage of Omaha as well as Charlie Munger and even Bill Gates! Whilst others book a 50 seater for an AGM, a whole convention centre in Omaha was booked for Berkshire’s AGM.
How Can Shareholders Attend An AGM?
As long as you are a registered shareholder (In your name, otherwise you might have to get permission or obtain a proxy form from a registered shareholder) of the company, you are entitled to attend their AGM.
In the event shareholders are unable to make it for the AGM in person, they can elect a proxy (A representative) by signing certain documents to vote on their behalf.
Here Are Three Reasons Why You Should Attend An AGM
1) You get to ask questions to the Directors and Management face-to-face
As a shareholder, you have the right to ask any questions and by observing their reply face-to-face, you can tell if their interests are aligned with yours!
This would be time to ask those burning questions directly to the Directors and Management.
Questions could span from:
i) Any key developments we should know about in the coming year?
ii) How are our operating margins compared to Competitor A?
iii) Have we met our targets in the previous year? If not, why so?
iv) Are you considering share buybacks?
v) How do you determine your dividend payout ratio?
2) This would help in your decision making processes
Attending an AGM is an important part of an investor’s decision making process. In this world, we tend to make decision based on incomplete decisions. Although attending an AGM would definitely not answer all your concerns, it serves as an important piece of the puzzle in understanding the company’s culture.
For instance, a straight shooting and honest management in their replies would give you a greater confidence in investing in this company.
On the other hand, if the management were to give you vague replies to most of your concerns, it could be a potential red flag!
3) Finally, you also might get to have lunch there and mingle around with the Directors and Management in smaller Groups
After the grilling session, most AGMs would either have some light refreshments or even a whole buffet meal (Some are rather legit) and even free samples of their products. In the past, attendees of Haw Par Corporation Ltd’s (SGX:H02) AGM was mentioned to get some of their Tiger Balm products as a door gift!
Free food and gifts are always welcomed. However, the highlight would be the interactions with the people that you entrust your money to!
In certain situations, if you ask the right questions you could get in depth insights into the company’s operations and culture that may be a crucial part of your puzzle. This would tie in with an improvement in your decision making process as mentioned above!
Value In Action
To sum it up, we here at VIA feel that attending an AGM would be beneficial for you as a shareholder. This allows us to look the Directors and Management right in the eye to address our concerns!
And since we are there, we can also network with like-minded investors along the buffet queue 🙂
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We will only provide you with information relevant to value investing. You can unsubscribe at any time. Your contact details will be safeguarded.The information provided is for general information purposes only and is not intended to be any investment or financial advice.
All views and opinions articulated in the article were expressed in Mun Hong’s personal capacity and do not in any way represent those of his employer and other related entities. Mun Hong does not own any shares in the companies mentioned above.
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