It wasn’t an impressive start to the 2025 AGM-season with Clicks, Sygnia and Nampak delivering unimpressive performances. Well, actually, in Nampak’s case, it was more the shareholders who put in a grim performance.
So grim that it’s difficult not to suspect we’re witnessing the deconstruction of the traditional listed company model of capitalism. That may seem an overstatement; after all, these three companies are comparatively small, and it may be too early in the new year to expect investors to be fully engaged, but a long-term pattern does seem to be emerging.
And it’s not just at AGMs but with shareholder engagement generally. Consider the current Saudi-backed bid for control of Barloworld. It’s an unusual deal that could set a disturbing precedent, and yet there hasn’t been a peep from any local shareholders. We’ve had to rely on a UK-based investor for any public discussion of the deal.
So, the question is, can shareholder capitalism prevail in an environment where shareholders are not engaging with the managers running their companies? Should we accept that the private, behind-closed-door engagements between institutional fund managers and corporate executives are an adequate form of oversight?
Let’s not forget that these institutional fund managers are supposedly acting on our behalf – that is, on behalf of the millions of employees, pensioners and savers whose money they oversee. Can we assume these cosy closed-door meetings will bring out the best in the managers who determine how well a huge portion of our economy works and, ultimately, how comfortable we will be in retirement?
Not the free press
Sygnia isn’t generally an AGM I would attend, but my editor heard journalists were banned – again – so I had little choice. If companies really don’t want journalists to attend their AGMs, perhaps they should invite them. Just a thought.
Anyway, a friend sorted out a proxy for me, and so there I was, one Tuesday morning in late January, attending a Sygnia AGM and wondering why on earth they would bother banning journalists. Simply because they can didn’t seem like a sufficient explanation.
It was all over in 25 minutes, with huge support for all the resolutions and some interesting insights into the operation of the government of national unity from the chair. “Both sides need it to work, so I’m cautiously optimistic for the next year,” Haroon Bhorat told shareholders.
So, Sygnia gets a full 15 points for providing a hybrid option; three out of five points for guests access, with two points docked for excluding journalists; seven out of 20 points for a live video feed which did not provide sight or much sound of the answers and comments from CEO Magda Wierzycka; 10 out of 10 for allowing written and verbal questions, though only one shareholder, who was there in person, did ask questions; 20 points for the ability for shareholders to communicate concurrently, though, again, shareholders didn’t seem interested in communicating; zero points out of five because Currency could not locate any minutes of the previous year’s AGM.
Sygnia scored a generous total of 55 out of a possible 75.
Room for improvement
Clicks is an oddity when it comes to governance. David Nurek, its long-serving chair (perhaps the longest-serving on the JSE?), stepped down after the AGM in January. Nurek, whose involvement with the group goes back to the 1970s, had been chair since the group relisted in 1996. Another peculiarity is that Clicks only has the two committees required by law: audit and risk, and social and ethics. It also has a remuneration committee, which is not yet required by law but will be soon.
Clicks gets seven out of 15 for its sort of hybrid affair. You have to be fairly determined to find the notice of AGM on its website and then extremely determined to discover towards the end of that notice that the AGM is an in-person event, but “provision will be made for shareholders to participate in the AGM by way of electronic communication”. Any shareholder who wanted to participate electronically was forced to write to the company secretary as well as the transfer secretaries.
This is an unusual attitude given that just over 60% of Clicks’s shareholders are international. Surely, they should be making it easy for them to attend the AGM.
The company gets zero out of five for the lack of ease of access; 10 out of 20 points for the quality of its live video feed; 10 out of 10 for the ability to ask questions; 20 out of 20 for concurrent communication, and zero out of five for not publishing minutes of its AGMs. So, a total of 47 with lots of room for improvement.
The case for being there
Nampak gets 15 out of 15 for its hybrid option; zero out of five for ease of access for guests, as Currency had to resort to engaging with the company to get access; it gets 20 out of 20 for the quality of its live video feed; and 10 out of 10 for the ease of asking questions – though it’s important to stress that only one shareholder, who was attending in person, asked questions; almost by default it also gets 20 out of 20 for concurrent communication, and zero out of five because Currency could not locate minutes of previous AGMs. A total of 65.
If ever proof was needed of the benefits of attending AGMs in person, it was provided by small-cap analyst Anthony Clark, who was the only shareholder to attend the Nampak AGM. He wrote an excellent account of the meeting for his clients.
“Ninety-eight percent of the heavy lifting and restructuring has been done, and we can now focus on operational efficiency and growth,” Nampak CEO Phil Roux told shareholders, noting that debt was coming down. Roux was upbeat about “strong demand” for beverage products for which they’d recently added local capacity. “If we could produce more, we could sell much more,” said Roux.
On the overall fast-moving consumer goods sector, Roux issued a word of caution. Performance had been disappointing, and he believed “the consumer was flatlining”. Only beverages were bucking the trend.
Clark, an accomplished AGM attendee, tells Currency there were signs of a fall-off in attendance at AGMs ahead of Covid. After the pandemic, “analysts and fund managers seem keen to avoid in-person meetings, even results presentations seem not as popular as they used to be”.
This, of course, gives determined analysts like Clark an advantage, but it makes for a less vibrant, less engaged marketplace.
An earlier version of this story noted incorrectly that the remuneration committee is a legal requirement. This is not the case. We regret the error
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