Corporate India continues to delay holding its annual shareholder meetings, a report by proxy advisor Institutional Investor Advisory Services (IiAS) said on Wednesday.
In the fifth edition of IiAS’ study on timelines of Annual General Meetings (AGMs) of S&P BSE 500 companies, the advisor found that there is a correlation between performance and the timing of the AGM: the later the AGM, the weaker the performance.
“Corporate India can improve, and must be better structured to close their books, publish their annual reports, and hold their AGMs sooner. The Kotak Committee on Corporate Governance has taken the first step in addressing this by advocating that the top 100 listed companies by market capitalisation hold their AGMs within five months of the financial year-end. If accepted, 28 of the top 100 companies which held their AGMs in September 2017 will need to advance their AGMs to comply with these provisions.” The report also noted that other countries, such as South Korea, Thailand, Italy, Singapore and Japan had much shorter AGM timelines.
The study also found that of the 54 firms that reported losses in FY17, 28 held their AGMs in September.
“Perhaps, companies are hoping that the conversation with its shareholders over weak performance may well be mitigated by a better first quarter performance. Or, it may just as well be that companies are just negotiating a bit too much with their auditors. But, if 30 per cent of S&P BSE 500 companies, encompassing multiple sectors and sizes, hold AGMs within four months of the financial year-end, there is no reason why the other 70 per cent should not be able to do so,” the report said.