Preparing for 2024 AGM season: a guide for UK-listed companies

We have published AGMs Update - A guide for UK-listed companies in 2024, which focuses on on issues for UK listed companies to consider as they prepare for their 2024 AGMs.

Topics covered include recent trends in shareholder engagement, the latest investor views on issues such as climate and other environmental issues, diversity, and remuneration. The guide also includes practical tips on managing a successful AGM. 

With regard to climate and other ESG issues:

• In 2023, there was a marked decline in the number of “say on climate” resolutions, fitting into a continuing downward trend from 2021 and 2022. Say on climate votes are generally advisory only (i.e. not legally binding), and range from requests for disclosure reports to be “received” to requests to actually approve whole climate transition plans. Approval of management proposals (and votes against shareholder requisitioned resolutions) remain high – to date management’s proposals have all passed, while requisitioned resolutions have not been approved. A few companies have, however, received significant levels of dissent against management proposals in recent years when there were competing shareholder-requisitioned resolutions. Fossil fuel companies remain in the spotlight of activist investors seeking to influence transition plans (see for example recent FT coverage here). 
• Boards may wish to continue to engage with shareholders on whether they would welcome the chance to vote on a climate resolution, and what their expectations of that resolution are. In any case, where appropriate, boards should focus on developing a robust and credible transition plan, as well as reporting on climate risks, opportunities and progress. Investors may expect companies to follow the Transition Plan Taskforce’s guidance (published October 2023) on disclosing transition plans. The TPT  guidance aims to set the “gold standard” for such reporting, covering the company’s strategic ambition, the actions it proposes to take and the accountability arrangements to embed its transition plan within the organisation (including board oversight, management accountability, corporate culture, incentives and training).
• Looking beyond climate concerns, the recommendations of the Taskforce for Nature-related Financial Disclosures (TNFD) provide a new benchmark for investors with ESG concerns, with nature highlighted as an area of focus by, for example, the UK Pensions and Lifetime Savings Association, which also says it is focusing on the “S” in ESG and the Green Taxonomy initiative.
• Shareholders and proxy advisers will also look at the FCA’s diversity disclosure requirements and targets (which apply for financial years beginning after 1 April 2022). IVIS “red-tops” companies that do not meet these targets, while ISS and Glass Lewis may recommend voting against the re-election of the nomination committee chair in such cases. This year, Glass Lewis has added ethnicity as one of the factors the nomination committee should specifically reference alongside gender in its diversity policy.