The digital future of the annual general meeting?

Talanx AG was one of the first German companies to hold its AGM in an entirely virtual format on 7 May 2020, thereby ensuring that the event could go ahead on the scheduled date despite the coronavirus pandemic. Shareholders had the opportunity to submit questions prior to the AGM and were able to exercise their voting right electronically until shortly before the ballots were counted. Carsten Werle, Head of Investor Relations at Talanx AG, shares his thoughts on the digital future of annual general meetings in the following interview.

Mr Werle, why did Talanx AG decide to hold a virtual annual general meeting?

Last year's AGM was attended by some 700 shareholders, service providers, in-house employees and members of the corporate bodies. It will not be possible to hold such a large event for the foreseeable future. The virtual AGM enabled us to go ahead with the annual general meeting as planned on the date that had been announced and have votes taken in a timely manner on proposed resolutions regarding such matters as the dividend, while at the same time protecting the health of everyone involved.

What is different compared to a physical event?

For a start, many things are the same: the formal procedure, the address by the chief executive officer, the answers to questions raised by shareholders and shareholder representatives and the subsequent adoption of resolutions. Anyone looking to stay well informed about their company and exercise their voting right is very well off with the virtual format – possibly even better off than they were before because it is possible to participate from anywhere.
What's lacking to some extent is the interaction and direct exchange: there was no opportunity this year for shareholders and shareholder representatives to address the meeting. It was only possible to raise questions prior to the event. Furthermore, in conformity with the coronavirus-related requirement for physical distancing, the corporate bodies were only partially present on-site and the stage this year was smaller. The Board of Management was represented by Mr Leue and Dr Querner, while the Supervisory Board was represented by Mr Haas – who chaired the meeting – and Dr Lindner.

What challenges did you face?

It was not until the end of March that lawmakers made this legally possible. Just a few days later we were one of the first German companies to send out invitations to a virtual annual general meeting. Much of it was uncharted territory, both organisationally and legally. Together with the very narrow timeframe and the lack of precedents that could have provided some guidance, that was without question the greatest challenge. The members of staff involved mastered it superbly. In some respects, we have actually become a blueprint for other companies' virtual AGMs.

How would you rate the virtual event?

We had a higher level of participation than in the previous year – with more than 93% of the shares represented – and also received numerous very searching questions. I found the speech by Mr Leue and the responses to the shareholder questions to be highly informative; at the same time, the duration of the event was good at just under 2.5 hours and it was easy to follow for externals. All that supports a good A-grade. I consider the stage design and interactive elements to have been a success, but I'd rather leave others to evaluate the B-grade. What is clear is that we are taking a close look at what others have done so as to see where we can make further improvements.

Would you hold the AGM in a digital format again in the future?

For the time being, the legislator has permitted the virtual format for 2020. We are currently seeing that many companies in Germany are making the most of this option and trying things out in a protected legal framework. I find that very refreshing. After all, the existing format was looking increasingly outdated and in established practice – based in part on the painful experience of many companies – it had become geared primarily to avoiding legal risks. If a new format can convey more information and ensure greater participation, that's something I find desirable. When it comes to annual general meetings, as with so many other things, the time before coronavirus will not be the same as the time after it: going forward, though, I would tend to expect the option of hybrid rather than purely virtual formats.

Mr Werle, many thanks for this interview.