Small investors are moving away from demanding chocolates and cold drinks at shareholders’ meets and are now posing relevant questions to the people running the show at India Inc.
The management of Infosys, India’s second-largest software services exporter, faced questions on the miniscule number of women directors on its board and low allocation to its corporate social responsibility (CSR) arm from retail investors at its annual general meeting (AGM) on Saturday.
Ann Fudge, who serves as an independent director on the Infosys board, is the only woman of the company’s 15 member board. Infosys has allocated Rs 30 crore to the CSR division through the Infosys Foundation.
“Some of the concerns raised by retail shareholders – like those on performance appraisal and compensation structures and women directors - are thought-provoking. It is indeed disappointing that institutional investors don’t necessarily raise these issues with the companies,” said InGovern Research Service, a Bangalore-based proxy advisory and corporate governance research firm, in an Infosys AGM note.
In another AGM last week, retail shareholders of Reliance Industries, the country’s second-most valued firm, quizzed chairman and managing director Mukesh Ambani on issues like falling output at its gas field in the Krishna-Godavari (KG) basin and the company’s recent investments in EIH and TV18.
“I am deeply perturbed with the falling gas output of RIL’s KG-D6 gas field. Why doesn’t RIL hire some expert to check the falling output? BP has been on board for over a year now, but nothing much has been achieved," questioned S Mehta, who owns 200 RIL shares, in the AGM.
Small shareholders of Mahindra Satyam, erstwhile Satyam Computer Services, didn't shy away from asking sharp questions to the Tech Mahindra management at a court-convened AGM to consider the merger of the two companies held last week.
Raising apprehensions over the share swap ratio of the merger, a Mahindra Satyam shareholder said, “The Tech Mahindra management should have waited till Mahindra Satyam improved its profitability and its share value, at least till 2014”
In stark contrast, during last year’s RIL AGM, a shareholder had made a request to the billionaire Ambani to serve chocolates and wafers instead of ice creams after the meeting.
A few shareholders at the Tata Consultancy Services (TCS) AGM, in the same year, even went to the extent of questioning Chairman Ratan Tata’s single status and quibbled for soft drinks.
Says independent market analyst S P Tulsian, “Investors these days are educated and are well aware of the issues the company is facing. It’s a welcome change to see them asking relevant questions to the management rather than simply praising them.”
Tulsian believes if small investor's get a platform to highlight their voices the way institutional investors get, it could make a big difference in the leap forward.
