Shareholder turnout at company annual meetings has fallen in the UK this year, leaving it behind other countries where companies’ adoption of video conferencing has been a boon to shareholder engagement.

The number of investors turning up at annual general meetings of UK companies fell 9% in the first half of this year, according to data from Lumi, a company that provides the technology for most FTSE 350 general meetings. of UK participation came despite investor participation more than doubling globally, according to the data.

The rise of environmental, social and governance (ESG) investing has encouraged shareholders to take a more active interest in how the companies they own are run, leading to more investors attending votes on key decisions. The shift to online and hybrid meetings during the Covid-19 shutdowns has also made it easier for investors to participate.

However, Lumi blamed the decline in attendance in the UK on more companies returning to in-person general meetings after pandemic restrictions end.

“Companies that have gone hybrid this year have seen increased participation and engagement,” said Kerry Leighton-Bailey, director of shareholder engagement at Lumi.

But in the UK, she said, “a lot of businesses have reverted to physical-only meetings”, which aren’t as well attended.

“Obviously not everyone can turn up at the QE2 building at 11 a.m. on a Tuesday morning,” she said, referring to the London conference center where large UK general meetings are often held.

Annual meetings have become a battleground for investors looking to push companies to do more on ESG issues. Major UK groups such as Lloyds Bank and BP have seen contentious votes on issues such as executive pay and the climate.

Leighton-Bailey said UK governance rules prevent businesses from having online-only meetings, a requirement that was only temporarily waived during the lockdowns. Company secretaries are always nervous about the risks of technology failures, hacks or being overwhelmed with questions online.

“The governance community is very risk averse,” Leighton-Bailey said. “If you’ve held an in-person AGM for 65 years, that’s a big change.”

The cost of hosting hybrid meetings is also a factor, with some companies hesitant about the additional fees, especially if only a few shareholders show up.

Peter Swabey, director of policy and research at the Chartered Governance Institute, UK and Ireland, favors a flexible approach. “Some companies have a small number of shareholders, while others have several thousand in multiple jurisdictions. . . Companies will need to take different approaches,” he said.

Of 4,700 corporate meetings facilitated by Lumi globally, nearly two-thirds were conducted entirely online, while 22% were hybrid and 15% were conducted solely in person. In the UK, just over a third of meetings were in-person only, and the rest were hybrid.

Other countries, including Canada, Australia and South Africa, have seen double- or triple-digit increases in turnout this year compared to 2021.

Leighton-Bailey said “one of the biggest drivers of increased attendance and engagement levels is through the flexibility of hybrid and online general meetings.”

Do-it-yourself investor turnout in company votes in the UK has been particularly low in the past, with consumer advocates calling on companies and policymakers to do more to make it easy for small shareholders to influence votes.

Interactive Investor, the UK investment platform, said last month it saw a 48% increase in the number of votes cast by its clients at general meetings in the first half of 2022, compared to the same period last year. The platform pushed for more retail engagement in general meetings and automatically opted in to all its customers in a voting and information service.

However, participation still represented only 16% of the decisions that its clients could have influenced.

As retail shareholders increasingly buy shares through investment platforms, these companies have become intermediaries for individual investors seeking to influence UK companies.

“We know we have more to do, but the industry-wide virtual silence on the issue seems increasingly untenable,” said Richard Wilson, managing director of Interactive Investor.

“While investment platforms have a big role to play, so does UK plc. We need more hybrid AGMs. Traveling across the country for a meeting is a huge request from most people, while simple technological solutions offer alternative options.”