FORSYTE
How to get more than tea and sympathy out of an AGM
JOHN HOWARTH
Connoisseurs of annual general meet- ings, including those who remember Harry Hyams's invitation to gather at four p.m. on Christmas Eve (Was he the first indus- trialist to learn from trades union secretar- ies how to get the decision you want?), look back nostalgically on such occasions as the Brooke Bond annual thrash at the International Press Centre.
Several hundred private shareholders in gala mood used to cram themselves into the hall for the entertainment. The theat- ricals were provided by a brave and articu- late young man who regularly berated the board for the conditions on their tea estates in India. He started coolly, but as he warmed to the task the more traditional shareholders began to get restless. By the time he got round to suggesting that the dividend be cut and the proceeds used to improve housing, or whatever, 'disgruntled of Tunbridge Wells' and his supporters were on their feet chanting: 'You've gone on long enough,' or 'Sit down,' or 'Do we have to hear any more of this?' Through it all Sir John Cuckney listened urbanely and with studied politeness.
But, as is often the way with amateur theatricals, it was the refreshments rather than the play that were the thing. All resolutions passed, the tired and hungry moved with unexpected fleetness of foot to the bar and attendant finger buffet. Wait- ers, chosen more for their bravery than for their tableside manner, appeared with sal- vers and retreated in fearful disarray as the middle-aged, middle-class hordes charged.
Across town at a hotel just off Grosve- nor Square, the Tate & Lyle meeting still livens up a dull February afternoon for many. Here there is a triple benefit -- the meeting, the lunch, and the present — for each member of the audience takes away a gift pack of tea, or sugar, or molasses from the Tate & Lyle branded catalogue. My most enduring memory of the event is of a small lady, by then red of cheek and carrying a plate overflowing with canapes in one hand and a glass of sherry in the other, saying to me: 'I love these meetings, don't you? They always give us a nice lunch, and the sherry does no harm at all.' Unharmed, she tottered to the bar for a refill.
It is sociable of the companies — food and catering companies, not unnaturally, are the most evident — to offer hospitality at AGMs. It is also prudent, for it allows the wily old chairman to remind members, if the questions are a little pressing, that `we are now cutting into your drinking time.' That concentrates the mind wonder- fully. The technique is more successful than it ought to be in turning meetings into social rather than business occasions. For many small shareholders such meetings present perhaps the only occasion in the year when they can see their management and, more to the point, question it. It may appear a little daunting to get on your feet and ask a question (another safeguard the management may rely on), for, shyness apart, many of us feel we aren't sufficiently knowledgable to do ourselves justice.
Don't worry. Neither is 95 per cent of the rest of the audience. If there's some- thing you want to know, get up and ask and don't be fobbed off with a dusty or evasive answer. If you can do a little homework before the meeting, so much the better. And if the press is there you might be on to a real winner.
A suitable topic, for example, could be the freezing out of the small shareholder in vendor placings to finance takeovers. This is the method by which a deal is paid for, in whole or in part, in the bidder's shares which are placed with large institutions. The small shareholder is not invited to the party, suffers dilution of earnings, and is not offered the discount that far bigger and stronger holders enjoy.
Last time out I questioned some take- overs as such, rather than just the tech- niques employed to bring them about. I was delighted, therefore, to see that in the Dee Corporation bid for Fine Fare earlier this month the purchaser was forced to offer more shares to its own shareholders at a discount than it originally intended. Even more gratifying on this occasion was the fact that the disquiet was voiced by two of our most responsible institutions. If, as a result, new rules relating to share placings are drafted so that we all have a roughly equal chance (bearing in mind George Orwell's comments on equality), then 4 June, 1986 will be celebrated as a good day by the private shareholder.
It was another institution which drew much more attention than the company would have wished to the practice whereby already wealthy directors of Marks & Spencer were assisted to buy their homes. Though the big battalions have long since replaced the private shareholder as the major holders of equities, it would be a pity if all the 'watchdog' duties either went by default or were left entirely to the professionals. Not all our institutions take their responsibilities in this particular re- gard quite so seriously as the Pru, the M & G, and the Post Office Pension Fund (the three concerned in the above examples). Rodney Bickerstaffe of Nupe used to upset the faithful at the Grand Met. meeting by pointing out that growing privatisation of cleaning and refuse collec- tion, in which the company was involved, was endangering the jobs of his members. The speech was never received with acclamation, but he was only looking after his own members' interests in a way which, as a shareholder, he was perfectly entitled to do. Freedoms which we all enjoy and take for granted have a nasty habit of being eroded by neglect. In days when dear old Patrick Hutber's law is being proved time and time again in too many walks of life, it can be just as much the fault of sharehol- ders as of customers if companies and/or their executives get away with too much.
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