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Through enhanced corporate reporting, EY can support finance teams to meet demands for high-quality enhanced financial and nonfinancial information.
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Share more trending information
Shareholders increasingly expect to hear not just financial information but also trending information, i.e., non-conventional, forward-looking information that focuses less on financials but gives shareholders a view of how the board defines the vision and future of the company.
Take climate change for instance. Shareholders will be interested to hear about the impact of climate change on the business and the executive team’s plan to address the issue, including carbon emission reduction targets. Also of interest are the company’s climate disclosures and reporting, which will inform shareholders’ and investors’ decisions based on the business’s ability to navigate climate risks and opportunities.
Risk management is another area that shareholders keenly ask about to know how the current risk management structure helps drive business growth and builds resilience for the future. For example, does the current risk management system administer compliance with rules and regulations as well as physical and IT security procedures, thereby protecting against financial loss and reputational damage? Other trending information worth highlighting include transformation plans for business, digital or IT operations.
Make the most of the virtual platform
Many shareholders have by now adjusted to virtual AGMs — they see them as the new norm and may even prefer a virtual meeting so that they can attend it from anywhere. That said, this does not mean they will expect anything less than an in-person meeting in terms of content, transparency and engagement. Companies should therefore endeavor to make a difference this year and show that virtual AGMs can be just as effective in connecting with shareholders.
To achieve this, allowing live Q&A sessions at virtual AGMs will be pivotal in relieving the pent-up expectations of shareholders wishing to express their concerns. A live Q&A session also builds trust with shareholders as it demonstrates the board’s willingness to risk being asked difficult questions that it may not have answers to. The good news is that more companies are prepared to allow live questions at their AGMs as more and more boards are becoming comfortable in handling such questions.
Boards should also recognize that the audience attending the AGM may have changed over time and may be very different compared with a few years ago. If the organization’s business has evolved over time, so would the demography of its investors. Other than the familiar long-term investors, the audience may now include new-generation, savvy investors with purpose-driven ideals or even activists or lobbyists from interest groups.
This makes it all the more important for boards to take a thoughtful approach in conducting this year’s AGM and prepare well to get a better outcome than in previous years. Perhaps it can be said that the board’s role is both to defend the past and define the future. The upcoming AGM would then provide a perfect opportunity for the board to highlight the company’s track record in navigating a difficult period while demonstrating its stewardship in charting a bold strategy for a new normal.