Annual meetings often get a bad press, with critics writing them off as empty rituals. And it’s certainly easy enough to challenge their worth. They are expensive events and the only people who typically turn up are the bored or the retired, who are mostly interested in the free lunch, the giveaways and the opportunity for a day out. For institutional investors and analysts, the physical manifestation of this spring rite has long been an irrelevant exercise and they rarely bother to attend.
Some suggest that the Internet will provide an opportunity to get annual meetings out of ballrooms or hotels and into the ether. Proponents say this will save money, time and embarrassment and improve executives’ capacity to deal with trouble makers.
But to imagine reducing the annual meeting to an event that meets the need without the brouhaha is to fail to understand the true purpose and nature of ritual. As any social anthropologist will tell you, a community’s established rites traditionally had a range of purposes, including affirmation of the accepted values and purposes of the group.
In the corporate world of the 1990s, the ritual annual meeting has a similar role. It makes explicit the social structure of the company in question, its ethos and its stated purposes. And, as recent years have shown, annual meetings have a surprising capacity to catch the wider public mood and to move issues up the socio-political agenda. They provide activists with their best opportunity to garner publicity for a cause and, from time to time, they crystallise – or at least presage – the need for change. In that sense, they have the capacity to bring corporate leaders to account in a way that little else can and to raise issues that may not yet have impinged on institutional shareholders.
Anyway, the fact that these occasions appeal only to small stockholders is surely no reason to abandon them. Many companies pay little enough attention to retail investors as it is; to deny them their one chance of questioning senior managers would be churlish and cowardly. It would also be an abnegation of their duty as the village elders to fulfil their symbolic function at a ritual ceremony which, for those attending, is far from empty.
