Shareholders expect their listed companies to make a juicy profit and declare a handsome dividend at the Annual General Meetings (AGMs). The board of directors of a company approves the dividend amount, if there is any, and makes it public through newspaper advertisements.
It is the AGM, attended by the general shareholders, that finally approves the dividend along with many other issues, including a company's annual financials. The law concerned gives the AGM all powers to decide on company affairs. Besides, the AGM offers the general shareholders the opportunity to raise issues of their choice and seek answers from the board and management of a listed company. An AGM is, thus, more of an accountability platform. It remains a very important annual event, particularly for a listed company.
But what is the state of AGM of listed companies in Bangladesh?
The answer to this question, unfortunately, would not be ear-soothing. The holding of AGM does not carry any importance either to the shareholders or to the listed companies anymore. A section of companies and shareholders has transformed the event into an unimportant one.
During the last two pandemic-hit years, the listed companies held their AGMs virtually, with little participation from general shareholders. Even before the pandemic, the AGMs could hardly attract informed general shareholders. The lacklustre performance of the stock market could be one of the major reasons. But some developments surrounding the AGMs of some listed companies have discouraged the knowledgeable section of shareholders from attending this important annual event.
It all had started with the activities of some rowdy shareholders, as they demanded 'gifts' and conveyance allowance from the companies while attending the AGMs. Some companies gave in to their demand, thus, fuelling the greed further.
The situation had reached such a stage that many companies shifted the venues of AGM from Dhaka to distant places or factory premises to discourage shareholders from attending the annual event.
Some listed companies also allegedly hired outsiders to flex muscles or block genuine questions from the shareholders at their AGMs. The securities regulator had also got evidence of such developments and cautioned the companies concerned. Overall, the AGM of a listed company has, more or less, become a non-event in Bangladesh.
But that should not be the case. In developed countries, AGMs carry huge importance in the operations of the corporations. Even governments in those countries, at times, make relevant policy decisions in line with the wishes of the majority shareholders of corporate behemoths.
There is no denying that corporate governance in Bangladesh is weak and non-transparent. And this remains a stumbling block in the smooth operation of the country's capital market. Making the listed companies accountable to the shareholders, thus, remains an important job for the regulator concerned.
The company board represents the general shareholders. It needs to know the mind of the latter and run the companies accordingly. The top notches of a company should listen to the shareholders with patience at the AGM and make policies and work programmes in line with their genuine wishes. Here, the general shareholders also need to be well-informed about the company's activities and relevant other issues that have a direct bearing on its profitability and future growth.