- Siemens shareholders are staging protests during the virtual annual gathering
In a surprising twist, Siemens' tech behemoth's board faced a setback at their annual gathering. A small yet influential group of shareholders advocated for the reintroduction of in-person gatherings. Overcoming considerable opposition, Siemens was compelled to pencil in an in-person annual meeting in 2026. Almost 30% of Siemens' industrial and software conglomerate shareholders disagreed with the management's proposal to maintain virtual interactions for the subsequent two years. Lacking the necessary three-quarters majority at this year's virtual meeting, the proposition failed to pass muster.
This, following Tuesday's move by the tourism conglomerate Tui, where rebelling shareholders restored in-person gatherings. While 71% of Siemens shareholders supported the management's proposal, the required 75% majority eluded them. Siemens CEO Roland Busch and colleagues sought shareholder consent to organize two more digital annual meetings. Their rationale was that this would allow international investors to exercise their rights without the inconvenience of travel, and save resources without the complexities of face-to-face exchanges, which could be marred by spontaneous criticism, lengthy monologues, or disruptive behavior.
Before the pandemic, the annual meeting was the cornerstone of a corporation's decision-making structure, akin to the board and the supervisory board. Held once a year, shareholders had the chance to openly engage with company management and influence major decisions. These decisions included discharging the board (usually a formality), determining dividend distribution, and selecting the supervisory board.
Since the pandemic, businesses like Siemens have been hosting virtual annual meetings. 1) The necessity to maintain social distancing, avoiding disease transmission, and allowing for remote participation have driven this shift. 2) Government bodies including the Ministry of Corporate Affairs (MCA) in India and the Securities and Exchange Board of India (SEBI) have granted companies permission to conduct Annual General Meetings (AGMs) through virtual or video conferencing. 3) This flexibility has been instrumental in accommodating shareholder demand for remote engagement. 4) The adoption of digital technologies in corporate governance has been augmented by the pandemic, enabling companies to facilitate virtual participation. 5) The transition to digital AGMs has led to operational efficiencies, as seen in Siemens' streamlined virtual meeting process, reducing the need for physical infrastructure and minimizing disruptions.
Stakeholder engagement is paramount, especially in relation to shareholders. Companies like JDE Peet's NV recognize this and prioritize active listening and interactive engagement, ensuring shareholder concerns are addressed during strategic decision-making processes. Consequently, shareholders have developed a preference for more adaptable and risk-minimizing engagement methods.
1) Despite the successful implementation of virtual annual meetings at Siemens, a significant 30% of shareholders expressed their dissatisfaction with the proposal to continue digital interactions for the next two years.2) The setback at Siemens' annual gathering inspired shareholders to demand a return to traditional general meetings, where in-person engagement with company management could take place.3) As a result of the shareholders' advocacy, Siemens was forced to reconsider its stance on virtual meetings, planning an in-person annual meeting in 2026 to cater to the requests of their shareholders.
