When you purchase shares, you are not just buying numbers on a screen - you are becoming a part-owner of a business. It’s important to remember this fact because, as a part-owner, you have a say in how the business is run and the ability to vote at annual general meetings (AGMs) and extraordinary general meetings (EGMs).

AGMs provide a platform for shareholders to engage with the company’s management and influence significant decisions. Not engaging with these meetings means missing out on an opportunity to shape the future of the company you’ve invested in.

Even if you don’t own individual shares, it doesn’t mean EGMs and AGMs are irrelevant as investment trusts also hold shareholder meetings, which provide scope to hold fund managers to account for consistent underperformance.

The usual format for an AGM includes the presentation of the annual report, a shareholder vote on various resolutions and a Q&A session.

Typical AGM resolutions include:

• To receive the report and accounts
• To declare a dividend
• Election/re-election of directors
• Authority to allot shares
• To approve the remuneration policy and report

While it’s rare for resolutions to be voted down, significant opposition can influence future decisions. Special resolutions like moving headquarters, changing the company name or approving a sale require a 75% majority, showing how important your vote can be. Often these take place outside of the regular AGMs in so-called EGMs.

Major shareholders can also requisition EGMs, often to remove or appoint directors. Ignoring these meetings can mean losing control over significant changes to your investment.

For example, Boohoo (BOO) is currently facing a battle for control with Frasers (FRAS), which has a 26.1% stake in the online fast-fashion play and has requisitioned a meeting looking to appoint Mike Ashley as CEO, instead of the recently-appointed incumbent Dan Finley, to be held on 20 December.

Attending AGMs in person can allow you to question directors directly. If you hold shares in a nominee account (almost always the case when using an investment platform), you’ll need a letter of representation from your platform to attend in person and you should allow a bit of time for this paperwork to be dealt with.

Realistically, most of us probably don’t have the time to actually attend, particularly if we don’t live in London, but voting electronically is a convenient alternative.

That’s why the new AJ Bell service which lets you vote at AGMs and EGMs more easily is such a boon. With alerts on the platform and the ability to have your say at the click of a button, being a genuine part-owner of a business just got a whole lot easier.

DISCLAIMER: AJ Bell referenced in this article owns Shares magazine. The editor (Ian Conway) and author (Tom Sieber) of this story own shares in AJ Bell.

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