Investors are failing to use their shareholder voting rights - how to vote in upcoming investment trust AGMs
Forget the general election, investors can already make their vote count in the coming weeks at company annual general meetings. Here is how you can have a say on your stocks.
Investors are failing to make their vote count when it comes to the companies they invest in.
Voters may be weighing up political party policies ahead of the general election on 4 July. But this election fever rarely seems to spread to annual general meetings (AGMs) for publicly listed companies and investments trusts.
Research by interactive investor found 58% of its users never participate at AGMs and 22% rarely do.
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The investment platform warns that this means 80% of shareholders - four out of every five – rarely, if ever, exercise their right to be heard by executives at the companies they own a stake in.
That could mean missing votes on controversial appointments or investment policies.
Votes on boardroom pay, business governance, sustainability targets, as well as motions put forward by activist investors, are just some of the areas retail investors can cast their votes on.
As a shareholder, you may be able to vote on things like boardroom pay or the running of a company - here’s what you need to know.
What investment trust AGMs are coming up?
There are a number of upcoming AGM dates for investment trusts to be aware of where you may be able to vote.
Kyle Caldwell, collectives specialist at interactive investor, said: “Investment trust AGMs are a fantastic opportunity to hear from managers and boards, and – if necessary, hold them to account, even if the resolutions on the table are, more often than not, ‘business as usual’.”
He points to trusts’ independent board of directors as being a “key structural advantage” of investment trusts. “This includes oversight of managers themselves, and ultimately helping to look after the interests of shareholders (such as by driving down costs),” he adds.
“Many individual shareholders may feel their vote will not make a difference, but there is strength in numbers; if increasing numbers of investors engage and use their votes, it will result in private investors having greater influence over time,” he says.
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Who can vote at an AGM?
Anyone who owns stock in a company can vote in its AGM. Typically, each shareholder has one vote per share, meaning that larger investors, such as pension schemes, often hold more sway over key decisions.
But for retail investors, utilising your voting powers can be an important factor in having a say in how the company is operated. Whether it’s voting on your individual feelings or as part of a broader collective decision, it is worthwhile to make the most of your shareholder voting rights.
Richard Wilson, chief executive of interactive investor, says private investors can have a “powerful collective influence over a company’s conduct and future direction through their vote, should they wish to use it”.
How can I vote at an AGM?
There are a number of ways for investors to vote at an AGM.
Shareholders can attend the meeting in person or virtually, depending on the arrangements of the specific meeting, but you can also cast votes early by proxy or through an online portal.
But not all shareholders will be able to attend the meeting, and as such, companies and platforms have several ways to allow shareholders to cast their votes.
Proxy voting involves an individual voting on behalf of another shareholder, meaning they do not need to physically attend the meeting to vote. The shareholder will communicate their preferences to the proxy ahead of time. The company will share specific details about how this is carried out, but it typically involves a postal or online form.
How are fund platforms helping investors to vote?
Increasingly, fund platforms have sought to increase AGM participation by improving access, such as in-app voting and reminders of upcoming meetings.
In 2021, interactive investor made customer shareholder notifications for UK-listed securities opt-out, rather than opt-in, removing a major barrier to retail investor participation.
Hargreaves Lansdown and interactive investor also let users vote on shareholder meetings through their apps.
Such services offer retail investors “a greater say in the governance of the companies in which they hold shares and the democratisation of markets,” according to Tom Lee, head of trading proposition at Hargreaves Lansdown.
“Retail investors are taking a keener interest in having the power to influence corporations on important issues such as board diversity, climate change and sustainability,’ he adds.
In recent years, collective action has driven change at some of the largest companies in the world. Oil giants such as BP and Shell have come under pressure in recent years from shareholders and activist investors who want more action to be taken on climate-related resolutions.
Which platforms allow you to vote at AGMs and how?
When you invest in shares through an investment platform, you, in most cases, do not become the owner of the shares - instead, you become the beneficiary. This can complicate how you vote at AGMs.
Adding to the complexity are the differences in how each platform goes about managing your votes.
Here is a rundown of the major platforms and how you can take part in AGM season
interactive investor
You are notified if you are eligible to place a vote via its ‘voting mailbox’ service online. You then log into the accounts and cast your voting preference.
If you don't subscribe to this service, it is also possible to vote through the interactive investor app.
Hargreaves Lansdown
Investors can view shareholder meetings and vote through the Hargreaves Lansdown app.
AJ Bell
Similar to Hargreaves Lansdown, AJ Bell customers must get in touch with the platform. You must use the secure messaging service to state how you would like your vote to be cast.
Barclays Smart Investor
Barclays Smart Investor offers some online voting for high-profile companies, but typically, you must call the customer helpline if you are an individual looking to vote.
Fidelity Personal Investing
Fidelity offers a voting service through a third-party provider, Broadridge.You need to sign up for the service and will then be notified of any upcoming votes you can take part in.
What were the most voted shares last year?
According to ii, these were the most voted shares in 2023 by private investors:
Lloyds
Vodafone
BP
Aviva
Rolls-Royce Holdings
Lee Wild, head of equity strategy at interactive investor says it is the role of platforms to continually encourage” investors not to be put off by the misconception that their vote does not matter.
“Their voice can, and often does, make an impact. In fact, the more they use it, the more power it has. It’s ultimately a win-win, because by attending an AGM, voting, and raising questions, you’re not only helping build the collective strength of private investors’ voices, but you’re also simultaneously deepening your understanding of the business you’re invested in.
“And, as previous years have shown, these events can be catalysts and drivers for meaningful long-term change,” he says.
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Tom is a journalist and writer with an interest in sustainability, economic policy and pensions, looking into how personal finances can be used to make a positive impact.
He graduated from Goldsmiths, University of London, with a BA in journalism before moving to a financial content agency.
His work has appeared in titles Investment Week and Money Marketing, as well as social media copy for Reuters and Bloomberg in addition to corporate content for financial giants including Mercer, State Street Global Advisors and the PLSA. He has also written for the Financial Times Group.
When not working out of the Future’s Cardiff office, Tom can be found exploring the hills and coasts of South Wales but is sometimes east of the border supporting Bristol Rovers.
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