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By editorial@silicon.com, 18 July 2001 18:47

COMMENT Once every five years the government has to leave the cosy confines of Whitehall and Westminster and actually meet the public. Elections are sometimes dull affairs, but at least most people take some kind of interest. Not so with AGMs. They are the day that chiefs of public companies have to go and meet the people they officially work for. It's also the day they get their pay packets approved. But most of the people who should be there don't go, and don't make their voices heard. If everything's going well, an AGM is a rather boring day for everyone - three hours of unremitting tedium, listening to an elderly lady who owns 200 shares asking whether the ad campaign with the cute bear can be reinstated. But if ever a company's board deserved a toasting, then it's Marconi, yet they seem to have had a rather relaxed time of it today. Aside from the occasional gale of sarcastic laughter, things were pretty easy for a company which has recently joined the notorious 90 per cent club, with their plunging share price and disappearing revenues. That's because most shareholders stay at home. Even if they know it's happening, they rarely let their opinion be known. The big institutional concerns - who own the vast proportion of shares in companies like BT and Marconi - keep a low profile at AGMs. Most of their lobbying is done behind the scenes. But pension funds and investment banks own the shares on behalf of individuals, many of whom probably don't even know that they own shares in Marconi. It's not surprising that companies don't go out of their way to consult these people when they take their decisions. AGMs are, of course, annual events, and while determined shareholders can't be locked out, they aren't exactly encouraged to take part. But shouldn't smaller shareholders take a more active part? Why should the active members of financial markets, who demand quick profits above all else, be allowed to make all the decisions unchallenged? The bottom line? There is little prospect of better corporate governance if smaller shareholders don't make their voices heard.