City comment: Hybrid AGMs are good news for retail investors

The pandemic heralded the rise of the retail investor — now they are coming to the AGM.

Many shareholder meetings this year will be “hybrid” — a mix of the physical and the virtual. So participation will be broader.

An online element means people who would have otherwise been unable to trek to a conference centre in, say, Birmingham can now just take an hour out of their day and dial in. This is perfect for the new breed of retail investor, many of whom are young and still working: they can do an AGM on their lunch break.

What does this mean for management? Expect more informed and detailed scrutiny, says Kerry Leighton-Bailey of Lumi, which helps run AGMs for most FTSE companies.

The new breed of retail investor spends plenty of time online and is well informed about issues like climate impact and supply chain security. They ask about Scope 2 Carbon emissions rather than why their local branch of Supermarket X no longer stocks the Racing Post.

This is a good thing. In recent years shareholder meetings have too often become unproductive days of inane questions. Leighton-Bailey notes Lumi has never had to mute an investor in an online Q&A — the virtual equivalent of wrestling the mic from someone.

Retail investors are also more powerful. Organisations like ShareAction and platforms like Tulipshare are helping small-time investors leverage their collective power. Sainsbury’s has already agreed to pay the Real Living Wage rather than face a vote on the issue.

“You might only have five shares but collectively you have power,” says Leighton-Bailey. “You can’t ignore the retail investor.”