Raising their Voices: Shareholders’ Soft Engagement at Annual General Meetings

Abstract

The right to speak and ask questions at annual general meetings (AGMs) represents one of the few avenues for shareholders to interact directly and publicly with the firm's management. We examine the tone and content of shareholder communication during AGMs with a focus on environmental, social, and governance (ESG) issues. Using AGM transcripts of U.S. companies between 2007 and 2021, we find that both institutional and non-institutional shareholders are vocal about sustainability topics, with varying degrees of importance assigned to different ESG issues based on their individual relationship with the firm. Shareholders are demonstrably more vocal and negative about ESG issues at AGMs of firms with poor sustainability performance. Our findings suggest that the AGM dialogue may serve as a barometer of a firm's ability (or inability) to meet shareholder expectations, highlighting ESG areas that require improvement.

Keywords: shareholder engagement, annual general meeting, ESG, textual analysis

JEL Classification: G03, G23, G34, G39