Thursday, June 15, 2017

The Annual Endorsement Meetings (aka AGMs)

Who will deliver the Kenyan shareholder from the glaring ignorance that is the staple of corporate AGM meetings?  I have attended a couple of these meetings and they all seem to be reading from the same script.  After the mandatory verification and check in, shareholders make their way into the conference room armed with a glossy copy of the Annual Report and Financial Statements in hand. The Chair welcomes us, introduces the panel, and we get busy with the day's agenda.

The Managing Director gives his views, defends the accounts and few minutes later, we have a hit-and-run Q & A session.  Shortly thereafter,shareholders are asked to endorse the content in the Report. I am not too sure how many of us understand the intricate balancing act that is the Financial statement.  I am not sure how many even bother to go through it. Besides the line that reads: Earnings per Share, who can tell the stuff staring at us through the accounting crevices right in front of the shareholders' eyes?

For every item on the agenda, there is a Kenyan who proposes and another who seconds.  The choreography of this window-dressing sessions borders on the hilarious.  Are these fellows corporate stooges, propped up (or hired) to execute the will of the Board and management? could it be?

Then, what really matters to the rest of us shareholders comes to the fore. Our singular agenda is two-part: the freebies and the dividends.  Speaker after speaker talk about the smallness of the dividends and the fact that the freebies are of the wrong quality and quantity. ....could this too be another agenda item designed to distract the focus of the meeting from the core business? Are shareholders simply pawns spectating in a game of numbers beyond their league? could it be?

Who shall deliver the shareholder from this myopic view that focuses on peripheral matters instead of the corporate governance that steers organisations?

In their present configuration, the AGMs epitomize corporate felony. Beyond the auditor, there needs to be a body (either out-sourced or informed shareholders) who help shareholders interrogate the books and ask the right questions.  

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