May 17, 2023 seems to be a special day – at least from the perspective of those responsible for organizing general meetings in listed companies. A surprising number of decision-makers there this year apparently thought that Wednesday before Ascension Day was the ideal date for the owners’ meeting, after all one of the most important decision-making bodies of a stock corporation. Actually find on May 17th overall 35 general meetings Instead, the Protection Association of Investors (SdK) counted, including four companies from the Dax, the index of the 40 largest German listed companies: the energy group Eon, Deutsche Bank, Fresenius and the housing company Vonovia. And that’s not all: there seems to be a second favorite date: five Dax companies have secured May 11th.
How can that be? Wouldn’t companies have plenty of choice? Shareholder representatives suspect intention. “It is known from the market that some companies like to hold their meeting on Deutsche Bank’s AGM day in order to prevent critical shareholders from appearing,” says capital market lawyer Marc Liebscher from the SdK. He believes that the trend of holding general meetings digitally makes the game of hide-and-seek easier. The corrective of room availability is missing. “Because companies no longer have to orient themselves primarily to the available space, they may try to plan their appointments in such a way that they attract as little shareholder interest as possible,” says Liebscher. Which is not without a certain irony: According to their proponents, digital meetings should actually facilitate shareholder participation.
In fact, Deutsche Bank in particular is traditionally a magnet not only for shareholders who need to speak, but also for non-governmental organizations (NGOs) who like to use advertising to draw attention to grievances. However, since both fund companies and NGOs only have limited resources, they can usually only attend one AGM per day.
At Union Investment, the fund company of the cooperative banks, they also consider the accumulation of dates to be extremely unfortunate: “It makes it difficult for us to exercise our trustee function,” says Janne Werning, an expert in corporate governance at Union Investment. The fund managers, who have many companies in mind for their equity funds, could not attend several general meetings in one day. This is also impossible digitally, after all, one also wants to follow the meeting and broadcast speeches professionally and virtually. The Dax meetings on May 17th are all mandatory dates for active shareholders.
“Costs, errors and abuse will increase”
In any case, dissatisfaction among shareholder representatives has been growing since many companies want to raise the virtual general meeting from the exception in the Corona years to the standard. Large German fund houses such as Union Investment and Deka or the BVI fund association are in favor of maintaining face-to-face events. In view of the virtual general meeting, you see the shareholders’ right to have a say curtailed. For example, if the Executive Board stipulates in future that shareholders must submit their questions no later than three days before the AGM and these will then not be answered at the AGM but on the shareholder portal one day before.
The affected Dax companies said that the dates had allegedly been planned for years. Virtual meetings also make it possible to follow other events on one day, so a postponement is unnecessary.
Marc Liebscher from the SdK sees considerable damage to shareholder democracy as a result of the accumulation of appointments. The companies could hardly ensure that general meetings would be held properly, also because the few large general meeting service providers would have to handle several shareholder meetings in one day. Personnel bottlenecks would become noticeable, IT processes unstable. “Costs, errors and abuse will increase”. But the price is high: Less shareholder control not least increases the likelihood of financial scandals.