Using a tactic called "AGM intervention", activists are buying single shares in companies to gain entry to a company's annual general meeting. They then use this time "on the inside" to pose questions to the directors, to draw attention to their particular cause and to try to persuade the company to act in a different way. It’s similar to the strategy famously used by television presenter and chef Hugh Fearnley-Whittingstall, when he bought a share in Tesco and turned up at its annual meeting in an attempt to force a vote on whether the giant retailer should adopt better living conditions for chickens.
The AGM isn't the right place for issues
One activist group, the innocuous-sounding FairPensions, is aiming to train up a small army of individuals who will attend the annual meetings of FTSE 100 companies specifically to ask questions that will leave the board under pressure to look into the matter or to agree to improve their record.
FairPensions, named by the Observer as one of Britain's 50 New Radical groups, campaigns on issues such as fair wages, the environment, oil sands and more responsible investing generally. It offers training courses to activists and trade unions on how to make effective use of going inside a company's annual meeting and how to lever "any cause you’re passionate about" into the boardroom.
It offers advice on what to wear, what to say and how to drum up publicity for the cause. But first things first: before you can attend the annual meeting, you need to be a shareholder so there’s advice too on how to buy that single share (in certificated form) and what it'll cost - the price of the share plus a dealing fee of around £30.
It recommends thinking carefully about using a proxy because, for maximum impact, the best people to ask the question might be "a representative from a community adversely affected by the company’s operation".
It advises speaking "as a shareholder" so talk about "our" company and "we" and recommends being "seen as a shareholder not an activist to retain the sympathy of the room". That includes wearing a suit because it's "sad but true" that other shareholders are more likely to take your leaflets and talk to you if you are wearing one.
Questions should be prepared carefully - make them short, no rambling - and campaigners should read the company’s reports and accounts beforehand because if you can quote the company’s own words back at it, your point will be harder to ignore.
FairPensions warns that turning up with cameras or other equipment might backfire if security suspect you might be planning to use it in a disruptive fashion and you could be denied entry. Even so, the annual meeting should be treated as a media event - with opportunities both inside and outside - the media should be kept informed beforehand and afterwards, and if possible you should Tweet live from the AGM and have your media contact on standby.
It also says you should also familiarise yourself with who’s on the board - you need to recognise faces so you can make a beeline for them after lunch.
One activist who attended Shell's annual meeting in 2011 remarks how privileged he felt to be addressing the chairman and CEO of Shell, but not, he adds, "in a deferential, cap-doffing way" rather in a "coming face to face with power way".
"I like to think we put the living wage onto Shell’s agenda and it won’t be too long before no person working for Shell or any of its contractors is forced to live on poverty wages," he says.
Right time, right place?
But does holding a single share make someone an owner of the company with the right to set the agenda? I don't think so. And for all its laudable aims, and commitment to responsible long term investing, I suspect that large numbers of real shareholders who have invested often substantial amounts of money into the companies being targeted would not agree that their interests are closely aligned with those of the activist shareholders - who are not generally interested in the company's financial performance.
So next time you're at an annual meeting, how can you tell if there's an activist in the room - and should you be worried that they’re putting your own future security at risk? The answer to the latter question is almost certainly not. Even if companies are persuaded to become greener, cleaner and less short term in their outlook, they're unlikely to do so at huge financial cost. As for spotting the activist? Well, youth could be a clue. One campaigner that I spoke to said that as a result of his tender age, he "stuck out like a sore thumb" at the AGM.
