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4 Effective Ways To Make The Most Out Of AGMs

Annual General Meetings (AGMs) are, as the name suggests, an annual affair and the only chance in a year where shareholders have an opportunity to ask questions to the management team and to hear of the company’s plans and strategies.

I will encourage all shareholders to try their best to attend AGMs in person if they have the time. Engaging management is an excellent way to both assess the company’s potential and also to size up the human aspects of the team running the companies. Here are four ways to make the most out of AGMs.

Preparation – Reading Through The Annual Report

Annual reports are thick chunky documents which are sent to all shareholders two weeks prior to the AGM date. These contain a plethora of information, from the chairman’s letter to the operations review as well as the audited financial statements. Shareholders should perform the very basic task of at least perusing through the key sections of the annual report to review how the company had done in the previous fiscal year, reading through the CEO/Chairman’s comments and looking into the company’s prospects and plans.

Formulating Questions

The next step would be to develop a simple set of questions and points to bring up during the AGM proper. As the investor goes through the annual report, he can annotate certain pages or do a bullet point summary of questions he may wish to ask on certain aspects of the company, be it financials, operations or strategy.

Take Notes And Observe

During the formal proceedings of the AGM, shareholders will be invited to ask questions. The diligent investor should note down all questions asked and also jot down the replies provided by the directors and management. At the same time, the investor should also observe management’s tone and body language to gain a better understanding of how they react to questions and perhaps even criticism. Directors and management who are eager to sweep problems under the carpet or dismiss the tough questions may be perceived as being evasive; conversely, if management is candid and open, it would be a positive sign that they are willing to admit mistakes and to work on improving the performance of the company.

Speaking Directly With Management & Directors

After the formal business of the AGM has been concluded, shareholders should then initiate to meet up with members of the management team “offline” to get their queries answered. This part of the AGM can be the most fruitful, as management is not under pressure and also not being scrutinized by the entire room and can, therefore, answer questions in a more relaxed, casual manner. Some dialogue may also not be convenient in a formal setting, and I find that engaging management in such a way may also turn up interesting tidbits about the company which may not be immediately apparent.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.