AGMs: Where are the shareholders?

Writing about the East India Company in the 1700s, Nick Robins in his book The Corporation That Changed the World wrote that "the (East India) Company operated as a limited property-based democracy that was run for and by its shareholders......(The) Company's shareholders had to have £500 of nominal stock before they could vote either in the quarterly meetings of the Court of Proprietors held in March, June, September, and December, or at the annual meeting in April.

- AMIT TANDON

This was the high point in the Company's calendar, when over a thousand shareholders would gather to elect a slate of 24 directors."

Three centuries later, that time of the year is upon us again. As Indian companies have a March year-end, and six months thereafter to hold their shareholder meetings, we are heading into the annual AGM season. Most of the 4,300 listed companies, and innumerable more unlisted companies, will soon be holding their annual general meetings (AGMs).

But the disconnect between potential and actual shareholder participation is striking. Just 12,155 of the 69.24 million shareholders in the Nifty-50 companies attended the AGM either physically or virtually in 2014. The statistics alone begs the question: Have shareholder meetings outlived their usefulness?