Here’s an admission: for nigh on two decades, I’ve been attending company AGMs as a journalist — and I love it.
I’ve got to watch directors spar with testy shareholders, like at Sappi and Absa; I’ve got to witness how gruff no-nonsense CEOs such as Brian Joffe or Koos Bekker handle unexpected dissent, and how Sasol’s executives seem perpetually surprised when climate activists pitch up.
It provides a delicious flavour of a company’s culture, which was evident years ago for those who got to see silver-tongued rogues such as Brett Kebble or Markus Jooste spin a yarn in front of bobblehead non-executive directors, firmly focused on seeing no evil.
It’s a great way to get a feel for a company’s trajectory, and its management prowess, in a way that isn’t overly scripted or staged. That, of course, is precisely why some boards hate it. It’s an uncontrolled environment and, let’s be frank, who likes being held accountable in public?
But the danger is when the message filters down to some or other apparatchik who feels duty bound to bar the media from entering AGMs, in deference to some marketing manager’s feelings. Unaware of what’s at stake, the message is mangled, leading to a blunt “no access” policy.
Which is probably why, when that message emerged from the AGMs of both Rupert’s company Reinet, and the struggling retailer Pick n Pay, it raised all sorts of red flags.
Two weeks ago, Pick n Pay barred the FM from attending its AGM, saying “attendance is restricted to verified shareholders, duly appointed proxies and authorised shareholder representatives only”.
It was precisely the opposite of what any company that values governance should be doing.
But, as it happens, CEO Sean Summers puts this down to a communication glitch. “I don’t know how that slipped through. The media is always welcome at our AGM. Why shouldn’t they be — what happens there becomes public knowledge anyway,” he told the FM this week.
Summers might have a tricky job in nursing the 59-year-old retailer back to health, but ever since his first stint at Pick n Pay, where he played a savvy hand in defusing an extortion attempt in 2003, he has known how to handle the media smartly. “You know my philosophy: responsible journalists have a vital and pivotal role in keeping our society honest,” he says.
It’s a similar position to that taken by Johann Rupert, the founder of luxury goods giant Richemont, chair of industrial firm Remgro, and his family investment vehicle Reinet. Rupert, famously, has spoken on earnings calls of how he prefers journalists to analysts.
Which is why it was just as much of a surprise when Reinet last week also told the FM’s Marc Hasenfuss that he wouldn’t be allowed virtual access to its AGM in Luxembourg.
But Rupert this week said the wrong message had got through.
“There is absolutely no banning of media from our AGMs,” Rupert told me. “Unfortunately, Reinet is a Luxembourg-based company, which doesn’t generally allow media access, but we’re in the process of changing our articles of association specifically to allow this.”
Rupert said that he had “absolute” respect for the role that the financial media plays in keeping companies honest. “For 40 years, we’ve been allowing journalists in,” he says.
Yet it seems clear that this imperative hasn’t filtered down unanimously to the investor relations functionaries and marketing suits, particularly if Pick n Pay’s message is anything to go by.
This trend is worsened by companies such as Magda Wierzycka’s investment company Sygnia, which has repeatedly barred the media from its AGMs. For an asset manager, which handles people’s pensions and ought to know better, this is especially egregious.
Nicole Martens, the head of Just Share, a nonprofit focused on shareholder democracy, says companies that bar the media misunderstand their own place in society.
“Companies should want stakeholders to be able to understand how their business is run, to ask difficult questions, and to hear how the board responds,” she tells the FM. “Most stakeholders cannot attend an AGM themselves, so allowing journalists to attend is one way to make the information accessible to a wider audience.”
Of course, Martens is right that most boards don’t like their AGM to become a public reckoning — when shareholders pitch up and ask awkward questions about climate change, executive pay, or the way workers are treated.
But, chances are, investors and the public are asking these questions anyway; this is an opportunity to present the argument and demonstrate that governance is working.
“I struggle to see a defensible general principle for excluding legitimate media from an AGM,” she says. “If a company is prepared to answer questions in front of its shareholders, why should it object to those proceedings being reported to the wider public?”
Still, barring media from an AGM does have a useful function, in that it acts as a sort of canary in the coal mine for companies with a disturbing attitude to accountability.
Asief Mohamed, chief investment officer of Aeon Investment Management, says this is a clear red flag. “Public companies with a good story to tell would want the media to see what’s going on. So, when they do the opposite, maybe there is a story they don’t want told,” he says.
Accountability and transparency, he says, are necessary ingredients in high-quality governance. In the absence of that, it’s very much “buyer beware” for investors.
