BP Amoco seeks to scrap AGM

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The Independent Online
BP AMOCO, Britain's largest company, has proposed that the Government should allow multinational companies to do away with conventional annual general meetings.

In a submission to the Department of Trade & Industry's review of company law, Judith Hanratty, BP Amoco's company secretary, has suggested that the current AGM is outmoded and of little use to a company such as BP Amoco, which has most of its business interests and shareholders based outside the UK.

Ms Hanratty argues that as most shareholders fail to attend AGMs, they do not serve their corporate governance purpose as a check of how the company is being run. She is understood to favour a stateless type of meeting, perhaps using the technology of the internet to communicate with investors.

Her views are expected to raise the ire of many institutional investors. One leading fund manager said that it was another attempt by companies to avoid the sanction of shareholders. "Having a meeting is a good way of putting pressure on directors to justify themselves," he said.

However there are many who feel that AGMs have stopped being relevant as most investors vote by proxy without attending, and the only people who use them are protesters who want to embarrass the company.

Famously Cedric the pig appeared outside the British Gas AGM in 1995 as part of a protest against the fat-cat salaries of some chief executives. The protest was primarily directed against the then British Gas chief executive, Cedric Brown, whose salary was pounds 475,000. Shareholders demonstrated their anger at his annual package which amounted to pounds 1m - it had only been pounds 50,000 before privatisation.

Earlier this year, In July, the troubles of the British retail giant Marks & Spencer were publicly displayed at their AGM. One shareholder gave a practical demonstration of why the company is losing customers by modelling clothes from rival C&A. She claimed that is what she would like to wear and accused M&S bosses of being out of touch and out of date. The woman, in her 50s, said M&S clothes did not fit and criticised its underwear for being boring and not sexy enough.

At the first AGM of Lloyds TSB in March 1996, TSB shareholders were shocked by the nine streakers who took turns throughout the meeting to strip off. A group called Lamb (the Lloyds and Midland Boycott group) orchestrated the streakers in opposition to the banks' mergers. TSB shareholders had never witnessed such disruption at an AGM. The disturbance worsened when, in addition to the streakers, rape alarms were set off.

Opposition to the damaging effects open-cast mining has had on territory indigenous to American Indians has resulted in the British conglomerate Hanson regularly seeing protesters at its AGMs. Measures are taken to prepare for possible protests, but in 1995 Hanson bosses were taken by surprise. A new set of protesters, Minewatch, attended the AGM dressed as businessmen and school teachers. They then took it in turns to raise their protests until the frustrated chairman was on the verge of throwing them out.

And in the most amazing incident, Tiphook chief executive, Robert Montague, was forced to admit that bankruptcy proceedings were being taken out against him, after a question at the group's AGM. Tiphook's chairman, Rupert Hambo, was unaware of the court action against Mr Montague.