I AM convinced that companies that make an effort with their annual general meetings (AGMs) deserve a dash of goodwill from the market.
While increased incidences of shareholder activism have enlivened AGMs in recent years, there are still meetings where directors are only to happy to rush through the official itinerary and scurry off for a cup of tea.
Questions from shareholders seem to be viewed as bothersome or tedious, and can be dealt with in an offhand manner.
There is often the inference – particularly if the financial press is present - that enquiries are best dealt with over tea and biscuits. In other words, not in the public domain (which, of course, prejudices shareholders).
Some company executives recognise that shareholders making the effort to attend the AGM perhaps do deserve a little something in the way of an operational update or discourse on the relevant industry conditions or wider economy.
Remgro [JSE:REM] chairperson
Johann Rupert is always full value at an AGM – and can expound, in a most entertaining and enlightening fashion, on a number of topics.
Johnny Copelyn and
Marcel Golding, the prime movers at
Hosken Consolidated Investments [JSE:HCI], were astoundingly open and frank about the group's various investments at the last AGM I attended.
Empowerment groups
Brimstone Investment Corporation [JSE:BRT],
Grand Parade Investments [JSE:GPL] and
Sekunjalo Investments [JSE:SKJ] also go the extra mile with their AGMs – making sure operational issues are addressed at length. Brimstone and GPI even go as far as hosting AGMs after hours, to ensure shareholders that nine to five employees can also attend.
This week one of my regular correspondents, brand guru
Jeremy Sampson, pointed out that a well-known international retailing firm actually reached out to its shareholders ahead of hosting its AGM.
Correspondence from the company asked whether shareholders had considered coming to the AGM in person. And it then pointed out that by attending the AGM, a shareholder could meet the board of directors and hear about the business.
The company – obviously in an effort to demystify the oft-intimidating corporate processes - also issued a brochure explaining exactly what happens at an AGM.
I was fortunate to attend financial services group PSG Group's [JSE:PSG] AGM in Stellenbosch on Friday. It was worth the price of admission (my diesel bill from Kommetjie to Stellenbosch) to to see chairperson
Jannie Mouton addressing shareholders in a makarapa, which he pretended to knock off during his more animated moments, and a Bafana shirt.
Because I attended the rather fractious
Pick n Pay Stores [JSE:PIK] AGM earlier in the morning, I never had the privilege of sitting through all the group company (Zeder Investments [JSE:ZED], PSG Konsult and Paladin) meetings.
Coming from Pick n Pay - where the AGM venue was chilled to a teeth-chattering point by the air conditioning and a frosty bunch of executives- the PSG AGM seemed a positively warm and friendly affair.
Intriguing titbits from PSGPacked to capacity with satisfied shareholders (and who can blame them, with a R100 000 investment in PSG in mid-2005 now worth a whopping R57m), Mouton added considerable value to the investor experience by confiding frankly with shareholders - who, after all, are part-owners of the company.
While Mouton for the most part provided a formal overview of the PSG empire, it was the off-the-script utterances that probably carried the most value.
For those who could not attend the PSG AGM, here are some of what I regard as the most intriguing fragments:
- PSG carried an intrinsic value of 3176c/share end of June, which means the shares are trading at a more than 20% discount.
- Former
Coronation Fund Managers [JSE:CML] boss Thys Du Toit – now apparently a sizeable shareholder in PSG – looks set to play an important strategic role in the company. Du Toit was instrumental in the recent restructuring of PSG Fund Management
- While PSG's other strategic shareholder, retail tycoon
Christo Wiese, was not in attendance, Mouton did pick out former RMB heavy
GT Ferreira – resplendent in faded jeans and a corduroy jacket – as "another big shareholder".
- Possibly in a reference to the drama that unfolded earlier at the Pick n Pay AGM, Mouton stressed PSG had no need for pyramid holding companies or N-shares. "We are controlled by friends and family... and among those listed as 'other' shareholders we also have a lot of friends."
- Thembeka chairperson
KK Combi – recently appointed to chair
Pioneer Food Group [JSE:PFG] – was, in Mouton's opinion, doing a sterling job in dealings with the competition authorities. Mouton noted that in football parlance Pioneer had received a yellow and not a red card.
- Mouton seemed unfazed by the fact that under King III corporate governance guidelines, he could no longer serve as executive chairperson of PSG. He noted wryly: "But I'll still keep an office there."
- Unlike other corporate headquarters, PSG's head office is not a cost centre but actually makes money. Mouton reckoned the PSG HQ might be the only head office that makes money in SA, disclosing a R23m profit before tax that stemmed mainly from fees received from subsidiaries Paladin and Zeder.
- Mouton let slip private education investment Curro – held in subsidiary Paladin - has big plans, BIG PLANS.
- Fin24.com