Those who disrupted these meetings lost sight of the time-honoured aphorism: “I may not agree with what you say, but I shall fight to the death for your right to say it." 1
As we have reported elsewhere, ESG-related shareholder activism is on the rise. Concerningly, the tactics used by some activists are evolving in worrying ways, highlighted by the recent annual general meeting of LSE-listed Shell Plc. According to one media report, activists glued themselves to seats at Shell’s AGM venue, engaged in continued interruptions and forced a three-hour adjournment of the meeting. Three people were arrested outside the venue for criminal damage.
Below we report on concerning developments in activist activities and what we think Australian listed companies and Boards should do before the next AGM season arrives in Spring.
What has been happening?
The Shell Plc AGM was held in late May in London.
Prior to the AGM, activists had proposed a resolution requiring Shell to set and publish certain climate targets and report on the strategy and underlying policies for reaching those targets. Shell’s Board considered the resolution not to be in the best interests of the company and recommended shareholders vote against it.
On the date of the AGM, protesters gathered outside the AGM venue and at least 40 protesters who were registered shareholders gained entry to the venue (according to one website, each of these shareholders had acquired shares in the company to give them access to the AGM venue). Unfortunately, the conduct of the AGM was not orderly. Protestors refused to adhere to meeting rules and the chairman adjourned the meeting after 40 minutes of continued interruptions. Police arrived and the venue was cleared, with the meeting resuming nearly three hours later. The activist resolution did not pass, attracting only 20.29% votes in favour. However, the disorderly and violent actions of protesters attracted significant media attention.
This was not a one-off event. A day later, environmental activists launched a protest outside TotalEnergies’ AGM to demonstrate against the company’s environmental policies. The protestors reportedly handcuffed themselves to each other and impeded shareholders’ access to the building. The AGM was eventually held.
In the face of these safety and security risks, it has been reported that other UK companies have strongly encouraged members to attend annual general meetings virtually rather than attend in person.
What does this mean for ASX-listed entities?
ASX-listed entities should not assume they are immune from violent or significantly disruptive activist protests at upcoming AGMs.
We think ASX-listed entities should carefully consider their AGM plans and whether they adequately address the risk of violent or disruptive protests. Amongst other things, ASX-listed entities should consider:
- The arrangements for the AGM including whether it will be held at a physical venue, i.e. as an in-person or hybrid meeting.
- If there is a physical venue, how it can be safely accessed and what security arrangements and screening procedures will be in place.
- Back-up plan(s) in the event that violent or disruptive behaviour occurs. What is appropriate will depend on the ASX-listed entity’s constitution and the circumstances. The AGM plan should address foreseeable circumstances and responses, including whether an adjournment to the meeting should be called.
Clear guidance for the Chair of the meeting. The Chair has the power and duty to preserve order at the meeting and to take care that proceedings are conducted in a proper manner. Chair scripts and pre-AGM rehearsals may not adequately focus on the risk of violent or disruptive behaviour. The Shell AGM is a salient reminder that the risk cannot be ignored.
References
[1] Flynn v The University of Sydney [1971] 1 NSWLR 857 at 858 (Street J).
