The chairman of Marks and Spencer says company law is “stuck in a 40-year-old time warp” and needs to catch up with the digital age.
Archie Norman was among the signatories on a letter to Kemi Badenoch, the business secretary, calling for digital AGMs and digital-only company reports, among other measures.
Speaking about company reports, he told Sky’s Ian King Live programme that a lot of time and expense is involved in producing hard copies and then posting them to shareholders.
The postage alone costs M&S more than £100,000, he said, with many FTSE 100 companies spending “probably a quarter of a million, maybe half a million” on the production.
Holding up a copy of M&S’s report from last year, he described it as “220 pages long, lovingly produced” and “full of very important information that practically nobody has ever read”.
The reporting requirements for companies have increased “astronomically” in recent years, he said, adding that the reports were on average 48% longer than they were five years ago and more than double what they were 10 years ago.
“They shouldn’t be mailed out to lots of people in this day and age,” he said.
“They should be posted online as they are, and people who want to access them can review them online because this is costing a lot of money.”
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‘Forests of the world have been demolished’
Mr Norman said a physical report could still be requested, but the current situation – spending many thousands of pounds on production and postage – is “totally unsustainable”.
“Forests of the world have been demolished to produce annual reports and it’s very expensive to do and takes a lot of company time and they’re not suitable communications for shareholders,” he added.
Mr Norman is also calling for digital AGMs to be encouraged – under current rules, a digital AGM is not a legitimate meeting unless a company goes through a lot of paperwork to be allowed to hold a hybrid meeting.
But Mr Norman said companies should be allowed to choose the format that works for the size, shape and geography of its shareholder base.
He said most shareholders are in different parts of the country and many cannot take a day off to come down to a company’s AGM in London, meaning that meetings are often dominated by retired people and “quite a lot of people too, who like the sound of their own voices rather too much – and that doesn’t make for a great meeting”.
“So what we’re saying is turn it into a digital meeting – open it up to the world… enable people in Newcastle and Leeds to attend and take half an hour off work to have a look into the AGM or time out of that day without having to travel to London.”
M&S started using digital AGMs early in the COVID-19 pandemic and continued to do so – Mr Norman said their physical meeting in 2019 had 561 attendees, while July’s had 1,700.
