Saturday, June 24, 2017

Views on Infosys’ 36th Annual General Meeting (AGM)

Many years ago, during my MBA I learnt about company structures, fiduciary duties and governance, and I studied about the Annual General Meeting (AGM). Over the years I have invested in shares of many public companies in India and the US, and continue to review annual reports (link to my blog), and follow earning announcements of companies I invest in.  I also follow business news with daily updates from the Wall Street Journal and NPR’s marketplace.

However, I hadn’t attended a company’s annual general meeting - until recently. As I am currently in Bangalore, I decided to take the opportunity to attend the 36th AGM of Infosys. It was also an opportunity to hear from fellow small-shareholders in person.

So, what exactly is an AGM? Wikipedia describes it as “An annual general meeting is a meeting of the general membership of an organization.”

I had spent over 8 years at the company in the 2000s and continue to hold INFY stock.  At the time, Infosys still had a “Powered by Intellect, Driven by Values” as its corporate slogan and was a media darling. Hardly any negative news got printed. Over the years the company’s astute PR and media management have eroded and it finds itself in the spotlight for all the wrong reasons – corporate governance issues, visa-fraud investigations, dirty laundry being washed by co-founders in public over CxO compensation, layoffs, impact of visa protectionism etc etc.  

This AGM like many others followed the expected agenda, starting with statements from the chairman of the board, CFO and CEO. Of all the leaders, Vishal Sikka came across as an articulate Stanford professor, with his discourse on emerging technologies and their impact on ‘businesses’ of technology services that Infosys is in.  

Infosys Board members address Shareholders

After the prepared talks by members of the management, it was time for shareholders to get on stage. As expected, their perspectives and points being raised were all over the place and most of them were happy to just have their two minutes of fame under the spotlight. Many picked on a favorite Infosys anecdote from the media and paid homage to the leader from the past - Narayana Murthy – and the ‘great’ work Vishal Sikka and his team were doing (under the ‘challenging’ circumstances). 
Infosys' small-shareholders  queue to ask questions

Following were the most common themes of the questions and comments  
·         A few shareholders asked for share buybacks like what TCS and other service firms had announced recently
·         Shareholders repeatedly pointed out the management’s poor track record in Public Relationship (PR) management, musing loudly if a better PR would address the ‘noise’ coming from the media. Many sounded frustrated that the management was spending all the energy in addressing trivial media ‘concerns’ when it could be utilizing its energies more productively
·         Some pointed asked about the role of Public Relationship (PR) management is addressing communication with co-founders who no longer had a seat at the board.

In recent times, I have moved to reviewing digital copies of Annual reports. At the meeting, I picked up a printed copy of the 240-page Annual Report, taking me back in time when printed ARs were the primary source of corporate information.

We live in an age of near-instant dissemination of news and opinions. Many of the topics including the presentations by Infosys executives were common knowledge even before today’s AGM. Back in the day, the AGMs served a purpose – getting corporate stakeholders, shareholders and the board of directors to engage with each other. The reality is that much of the shareholder engagement now, especially with larger shareholders happens behind the scenes.

Bottomline: Just as the printed Annual reports have given way to digital copies, the day may not be far off in the future when these Annual General Meetings go digital and virtual. 

Some south-Indian food for thought