Ethos, the members of the Ethos Engagement Pool International, its German partner DSW, Shareholders for Change and Better Finance, representing a total of more than EUR 350 billion in assets under management, are calling on the largest listed companies in Germany to stop holding virtual-only annual general meetings and to instead opt for a hybrid model in future.
The landscape for annual general meetings (AGMs) has changed considerably in recent years, particularly in the wake of the COVID-19 pandemic. Whereas previously almost all AGMs were held in the physical presence of shareholders, the health crisis and related public health directives have led companies to organise virtual-only AGMs.
Over the past three years, however, restrictions and even bans on meetings of people have gradually disappeared. Many investors and investor representatives, such as the Ethos Foundation and its German partner DSW, have argued for a return to AGMs where shareholders are physically present, or a hybrid model that allows shareholders to participate online but also, for those who wish, to be present at the AGM venue.
“The AGM is an essential part of shareholder democracy”, explains Vincent Kaufmann CEO of the Ethos Foundation. “It is often the only time of the year when shareholders can not only meet the management of the company of which they are co-owners, but also ask questions, submit ideas and proposals, and speak openly in front of the other shareholders.”
In Switzerland, where the Ethos Foundation has fought and continues to fight for AGMs with the physical presence of shareholders, the use of virtual-only AGMs remains limited for the time being. Since the beginning of 2024, only six SPI companies (Aevis Victoria, ASmallWorld, Bunge, Carlo Gavazzi, Orascom Development and Swatch Group) have chosen this option.
However, the picture is not the same everywhere. In Germany, for example, more than half of the companies in the DAX index, which includes the forty largest capitalisations on the Frankfurt stock exchange, continued to hold virtual-only AGMs after the end of the pandemic.
It is for this reason that Ethos, the members of its shareholder dialogue programme ‘Ethos Engagement Pool International’ and its German partner DSW, supported by Shareholders for Change and the European association of private investors Better Finance, which together represent more than EUR 350 billion in assets under management, have launched an engagement campaign targeting the largest listed companies in Germany to ask them to maintain physical AGMs in the future while allowing their shareholders to vote and intervene remotely.
“The constructive and direct exchange between shareholders and the board of directors, as well as dialogue between shareholders, are important elements of the AGM”, stresses Marc Tüngler, CEO of DSW. “The hybrid solution, which gives the company's co-owners the freedom to choose their preferred format for meeting once a year, remains the most appropriate format.”
On 23 October 2024, letters were sent to the ten largest DAX companies that have held purely virtual AGMs since COVID-19 and whose authorisation to continue doing so is up for renewal in 2026. The companies in question are Allianz, Beiersdorf, BMW, Deutsche Bank, Deutsche Börse, E.On, Infineon Technologies, Mercedes-Benz Group, Merck and Siemens.
Specifically, the letter urges the chairperson of the boards of directors and supervisory boards to reconvene their shareholders in person for the 2025 AGM, failing which the signatories might vote against the statutory authorisation that will be required to continue with a virtual-only format. The aim of this campaign is therefore to initiate a constructive dialogue with the target companies on the choice of format for their future AGMs.
