Dysfunctional & outdated - has the AGM has it's day?

It's a sacred institution to many shareholders but the days of the annual general meeting could soon become the latest victim of digital disruption.

The Australian Institute of Company Directors (AICD) says the annual general meeting has had its day and the concept is "dysfunctional" in today's online world.

A survey by the business lobby group has found a third of the 5000 company directors surveyed found the AGM is outdated and needs to change with the times.

Listen to Peter Ryan's story from AM here

"The old company AGM is no longer meets its purposes. We're getting fewer and fewer people attending. And many of the decisions are made well and truly before the AGM is opened," chief executive John Brogden told the ABC's AM program.

"The concept that through democratic capitalism shareholders come along to an AGM where they vote and decisions are made is long gone."

Mr Brogden says there are better digital alternatives to preserve the shareholder voice such as online voting and webcasts that were more useful to remote shareholders.

"There are mum and dad investors who do like to chat to the managing director or the chairman after the meeting but if you're in Perth you're hardly going to fly over to Sydney for an AGM." Mr Brogden said.

"I think people used to enjoy a bit of sport at an AGM. I don't know whether that's constructive. But what's very constructive is people having a chance to engage formally and properly that they're by and large not getting at the moment.

"We want shareholders to be engaged in the activities of their company. But we don't want the only time they turn up is when something goes wrong."

 The renewed pressure to overhaul the AGM institution comes as more companies face protest votes over company strategy and a number of "first strikes" against remuneration packages.

For the Australian Shareholders Association the latest attack on the sanctity of the AGM has unleashed the expected response.

ASA board member Don Hyatt says personal shareholder contact - or the human touch - can't be replaced by technology.

"This is the one time of the year that the directors and the chief executive has to face the shareholders," Mr Hyatt told AM.

"It's a great opportunity to actually look the directors in the eye - particularly afterwards over a cup of coffee. You can speak to them and you get a real feel on whether they've got the shareholder interests at heart or whether they're in it for themselves."

Mr Hyatt used the example of News Corporation and other family controlled companies where attempts had been made to limit shareholder dissent or discussion at annual general meetings.

"There are a number of individuals and family owned companies who seem to think they're not accountable to the shareholders," Mr Hyatt said.

But despite calling AGMs dysfunctional, John Brogden says his reform proposal is not about silencing shareholder dissent.

"No. In fact we want to make it easier to people to attend and engage. So if you're a critic it's also certain that changes to AGMs will make it easier for people to be engaged rather than harder."

John Brogden is about to start talks on the future of annual general meetings with big super funds and institutional investors.

But for now the AGM is safe as any plans to reform or dump the shareholder gathering is subject to government legislation being changed.