INVESTMENT COMMUNITY PERSPECTIVE

Dismal, Dull Affairs?
Most Annual General Meetings are rather dismal, dull affairs (to steal a line form the Rolling Stones) that follow a prescribed legal and regulatory format. The votes, for the most part, have already been cast – as most were made by proxy – so the whole event is a rather orchestrated exercise. Move this, second that; no stone is left unturned, as lawyers and transfer agents ensure that all goes according to plan. Questions from the floor are avoided, lest they derail the legal process. But people do attend AGMs.

The Typical AGM Audience
Unless the AGM is going to be a riotous event – and very few are – the audience tends to be filled with: retail investors (some just looking for a coffee and a Danish pastry and to get out of the house), company directors (some newly minted) and staff, perhaps interested customers, investment bankers and research analysts (there to be seen and shake hands with the senior executives, thereby showing they care), occasionally the press, and perhaps (but likely not) an institutional investor or two. (Institutional investors vote by proxy and don’t have the time to attend all AGMs, so they rarely attend any.)

An Opportunity All the Same
It may sound like all is lost, but it does not have to be. After the legal formalities it is time to roll out a corporate presentation, but not the typical one you normally present when marketing. You need to tailor your presentation to the audience at hand. For this presentation you likely will want to take more of a 30,000-foot view of the business, hitting on the corporate strategy, recapping the year gone by and highlighting the year ahead.

Avoid Too Much Detail
Since your audience is wide and varied, try to avoid granular details; the bigger picture will be greatly appreciated. The AGM is not the time to announce a new product, launch a new division or outline a new strategy. It is a great time to introduce executives and allow them to give a brief summary of their areas of the business at a high level. It gives these executives an opportunity to represent the company, show that all parts of the business are working together and convey a sense of corporate unity. Remember that many employees will turn out for the AGM and will be keenly interested in hearing the presentation; you want the message they hear to be the same one they work toward daily.

Encourage Questions from the Floor
Since questions from the floor during the formal presentation are typically avoided, tell the audience ahead of time that there will be a question and answer period later. As many people are shy when it comes to public speaking, perhaps consider allowing written questions to be submitted from the floor. With modern technology, questions could be texted.

Answers Should be Courteous and Straightforward – Avoid Arguments
Answers to questions should be kept at a ‘higher level’, bearing in mind the tone of the presentation. Remember to repeat the question so all can hear, and provide a little ‘thinking time’. Simple, straightforward answers are best; avoid long-winded responses and even the appearance of an argument or talk downing to the audience. Some questions are testy but it is best to keep the Q&A courteous and forthright. It may make sense to defer personal discussion until after the meeting in order to keep the tone and the flow of the event on track.

The KISS Message
Remember, you want to deliver a clear message that provides a good outline of the company’s business and philosophy, and always provide reasons why an investor ought to own your company. It’s the KISS philosophy: Keep it simple…

Dirk Lever is Managing Director, Institutional Equity Research, AltaCorp Capital Inc.