This article first appeared in Forum, The Edge Malaysia Weekly on July 11, 2022 - July 17, 2022

In times of crisis, enterprise-wide risks need to be effectively hedged against and navigated through in order to ensure organisational resilience and longevity, post-crisis. To this end, best-selling author Bryant McGill’s iteration that “crisis is a messenger” presents a hopeful outlook that crises should be viewed as opportunities to learn and adapt in the face of proverbial “Goliath-like” threats to business as usual.

Zooming in further into the inner workings of the modern-day corporation, the rise of digitalisation has inevitably proliferated its way into the way corporations conduct general meetings, of which annual general meetings (AGMs) feature most conspicuously. The rise of virtual and hybrid modalities has been touted by regulators around the world as a solution to maintaining healthy levels of shareholder participation amid social distancing measures.

Showing great agility, virtual AGMs were enabled at the height of the pandemic by the regulatory guide provided in section 340(2) of the Companies Act 2016 and the Securities Commission of Malaysia’s (SC) revised Guidance on Virtual Meetings of Listed Issuers. However, as with any human-designed conception, virtual/hybrid AGMs are prone to faults that debilitate transparency, reliability and shareholder democratisation. What’s more, an all-too-common stickler raised by shareholders who attend virtual/hybrid AGMs is the tendency of executives and directors to “hide behind the virtual divide”, resorting to the cherry-picking of questions raised at AGMs. As the executive at a leading global investment management firm put it, “We’re not necessarily against [virtual-only meetings] … as long as companies [conduct them] in a way that really mimics in-person meetings.”

Corporations have been faulted for not properly communicating how virtual/hybrid meetings are carried out — which have been met with perception-damaging consequences. A FTSE 250 Index-listed asset management provider was met with a shareholder revolt in 2021, with advisory firm Glass Lewis recommending a vote against the proposal to hold fully virtual AGMs given the lack of clarity on how shareholders’ right to participate would be safeguarded.

Transporting oneself back to local shores, the Minority Shareholders Watch Group (MSWG) has noted how the recent virtual AGM of a listed property development and management company was “unconducive for shareholder activism [when] compared with a physical meeting”. As Microsoft’s CEO Satya Nadella explains, “We want to ensure those [shareholders] joining remotely are always first-class participants”.

Now, as Malaysia begins the transition towards the endemic phase, many may wonder if virtual/hybrid AGMs are here to stay. To that question, it is worth highlighting that the general sentiment of Corporate Malaysia is indicative of a growing preference for virtual/hybrid AGMs. Furthermore, the technology to facilitate this will likely continue characterising the approaches listed issuers use to engage with their shareholders.

The demand comes directly from the shareholders themselves — the SC’s Corporate Governance Monitor 2020 (CG Monitor 2020) reported that at least 74% of shareholders voted in favour of an online participation option in a company’s AGM and extraordinary general meeting (EGM) even after social distancing is no longer mandatory.

Further accelerating the push for virtual/hybrid AGMs, the SC also issued a rallying call for listed issuers to continue leveraging technology to conduct general meetings beyond pandemic-related restrictions. This trend is seemingly mirrored internationally with roughly 86% of AGMs that took place in continental Europe in the first seven months of 2021 embracing a fully virtual modality.

It stands to reason that it is imperative for corporations to embrace the strategic pivot to virtual/hybrid to address the march towards “living with the virus” through the adoption of technological solutions that are capable of both enhancing shareholder engagement and standing the test of inevitable forces threatening normalcy.

When considering such a technological solution, corporations should consider weighing whether the features are functional for their needs and that of their shareholders. Ultimately, it would be worth considering if the tool is able to increase shareholder engagement and participation while upholding transparency and security, thus ensuring peace of mind. As another common issue is the lack of two-way communication during virtual AGMs, corporations should consider whether the technology is able to support features that bridge the divide for virtual/hybrid AGM participants.

Acknowledging the need for such a technology, KPMG in Malaysia recently formalised an alliance with Convene Malaysia (a subsidiary of Azeus Group) to enhance the AGM experience for listed issuers and their shareholders. The alliance equips KPMG with the exclusive right to introduce the ConveneAGM technology — an all-in-one platform offering a seamless, secure and fully supported virtual and hybrid AGM experience — in Malaysia.

By combining KPMG’s board advisory services with ConveneAGM’s established technology platform, we aim to revolutionise the future of general meetings in Malaysia. Listed issuers will now have access to a full suite of modern-day technological solutions that answer the growing call for a delicate balance between maximising shareholder participation and safeguarding the sacrosanct principles of shareholder democratisation.

Designed to break the barriers between in-person and virtual AGMs, ConveneAGM’s market-differentiating features include allowing shareholders to submit questions via text and video, instant voting and voting in absentia, simultaneous audio translation, latency-free webcasts, having reliable backup channels in the unlikely event of a glitch, ISO-certified security features and 24/7 support.

In the lingering presence of Covid-19, where mankind is forced to redefine the new normal, the search for sustainable solutions across all business pain points will persist. For listed issuers, technology will continue to play a crucial role in enabling opportunities.

“The Chinese use two brush strokes to write the word ‘crisis’. One brush stroke stands for danger: the other for opportunity. In a crisis, be aware of the danger — but recognise the opportunity.” Those were the words echoed by the late John F Kennedy in April 1959, which are perhaps worth revisiting to present a message of hope and optimism as an ailment to ward off “disaster fatigue”.

Kasturi Nathan is head of board advisory services at KPMG in Malaysia

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