If you believe the greetings with which many supervisory board bosses and company directors recently opened their speeches at general meetings, then the men – and a few women – really suffered from the fact that they had to move the annual shareholder meetings to the Internet because of Corona. Hardly any CEO who did not point out that a face-to-face meeting “including the liveliness of a debate with participants present” would have been really nicer, and hardly anyone who did not emphasize how much it is better to meet “in person”. shareholders and would have answered the questions “directly”. Like it’s a nice party.
The disappointment may have been feigned in many cases. Nothing annoys corporate leaders more than having to deal with the questions of annoying small and large shareholders for a whole day, at least when the business successes do not exactly inspire applause from the crowd. No wonder that many companies have taken a liking to the digital general meeting, where the process is much easier to control. And so the influential industry lobby has now apparently succeeded in anchoring the virtual general meeting as a fixed option in the German Stock Corporation Act, as can be seen from a draft bill by the Federal Ministry of Justice. The annual general meeting must agree to the long-term shift to the Internet. However, the right to ask questions is restricted. The already weak shareholder democracy in Germany is further damaged as a result.
The annual general meeting is more than just folklore with free sausages, commercials and impudent speeches. In addition to the Management Board and the Supervisory Board, it is the most important decision-making body in a stock corporation. Only once a year do shareholders have the opportunity to express their opinion personally to the management of their company and to ask questions that the Management Board must also answer. It’s often about very central things: management mistakes, the payment of the management team and more and more about how sustainably a company works. In addition, the shareholders make important decisions: the general meeting votes on the distribution and possible capital increases, and it elects the supervisory board. In the coalition agreement, the traffic light coalition had promised to protect shareholder rights, even if online general meetings were to be made possible on a permanent basis.
Limited Right to Ask
However, that failed. It starts with the fact that companies can move the general meeting completely to the Internet. Hybrid solutions that could combine the best of both worlds are not planned. It continues with the limited right to ask questions: Shareholders have to submit their concerns four days in advance, which often does not work even with shorter deadlines if the access data for the general meeting portal does not arrive in time. In addition, the Executive Board can prevent inquiries “without factual connection”, which opens the floodgates to arbitrariness. In addition, video messages from shareholders must not contain questions, even if a company agrees. It is also not intended that the questions will be answered in writing beforehand. Instead, the answers are often read out for hours, with important details being mixed up in legal mush or pushed to the end of the agenda.
Company bosses like to complain about how underdeveloped the German capital market is. In fact, many companies themselves contribute to this when they treat small shareholders like annoying petitioners and usually try to shake off so-called “activist” shareholders as dubious when they sometimes loudly demand that the management team be replaced or bonus cuts in the event of management errors. But it fits Corporate Germanywhere company bosses have not only recklessly become dependent on Russian gas, but often prefer silent financiers, even if they are from states like Qatar come. So if you are serious about shareholder culture, “after Corona” you should be present again at the Annual General Meeting. It’s not forbidden.