The number of activist campaigns in Europe has increased 12% year-on-year, as annual general meetings become a battleground for investors seeking to push companies on certain issues.

Annual general meetings (AGM) are becoming a battleground for investors as boards fear the rise of activist investing, where stakes are bought in companies with the intention of lobbying for change. The number of activist campaigns in Europe has increased 12% year-on-year, according to data from consultancy firm Alvarez & Marsal, with the pressure on boards expected to continue in 2024.

In the UK, ownership laws mean retail shareholders struggle to be heard, as a complex voting system – where they must contact the broker to participate in AGM as proxy – means many are excluded. According to Lumi research, this is has led to an increased appetite for digitalising the ownership process as firms are battle red tape holding them back from engaging directly with retail investors.

“Understandably, many boards are worried about the impact of activists disrupting meetings in 2024 and are looking for ways they can create a meaningful and productive dialogue with shareholders,” Pete Fowler, chief operations officer at Lumi, says. “Technology is playing a huge role in helping companies do that, by opening up conversation with shareholders ahead of the AGM itself.

“Retail shareholders continue to face obstacles in attending meetings in certain markets, particularly due to legacy legislation and issues in the UK and Australia regarding underlying shareholders. In contrast, markets like Asia and the Middle East lack the complexity of proxy plumbing systems seen in these regions.”

Fowler believes this is driving a move to making AGM’s more accessible, pointing to Lumi research showing hybrid events soaring to 40% of all meetings globally in 2023. “The appetite for hybrid is here to stay. The format continues to increase in popularity because it addresses the need to balance diverse stakeholder groups and provides inclusivity in comparison to traditional in-person meetings."

Last year, in the span of just six months, 15% of meetings utilised virtual microphones for verbal questions, with the UK leading at 47%. Despite unprecedented uptake for the hybrid meeting format, the data also reveals fully in-person meetings still account for one in five events globally. Fowler observes: “The reality is hybrid is good for governance.”