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Meeting Koh Boon Hwee: My First Annual-General Meeting at DBS

Having started investing in shares since 2003, I finally did what a shareholder is expected to do, that is to attend an annual general meeting and actually vote on the ordinary and special resolutions at the meeting with management and the Board of Directors of the business.

30 April 2010 2.00 P.M. was the Annual General Meeting for DBS group holdings. I have been an on-off investor in this share for a few years but only this time I still had 1 lot after taking profit on another lot for speculative play.

How I ended up at the Annual General Meeting

I happened to receive the annual report while still holding on to DBS and decided I should at least try to attend an annual general meeting of a listed company to find out just what happens at an AGM. What questions would shareholders raise and just what type of people actually invest in DBS and actually bother to attend AGMs?

I also had an “ulterior” motive in that I genuinely wanted to know how listed AGMs were carried out as one of my aspirations is to be a director on a listed company eventually when I am transiting to a different type of career post “retirement”. As I am an Certified Public Accountant and a Certified Internal Auditor, I do have the basic academic and professional experience to qualify to be a member of audit or finance committees and believe this is one development path for me post traditional “retirement”.

The answers to these questions were addressed at what I would call a very interesting session.

Registration

I learnt from attending the AGM that one doesn’t need to pre-register for them. Just appear with your NRIC as identification and the corporate secretariat services company doing the registration will verify your name against the register of shareholders and issue you with the annual report and other voting slip you require relating to the resolution to be passed.

Pre-AGM Briefing by CFO

Prior to the AGM, the CFO Chng Sok Hui gave a briefing on the financial highlights of the DBS group performance and also answered some of the shareholders’ questions. The briefing was fairly well presented and the slides were very clear. However, the shareholders, who consist mostly of retirees and men aged 50 and older were quite sharp in clarifying that the net profit for the year was flat. There were also specific questions on how the scrip dividends would be rounded off to the nearest share or fraction of the share and whether it would be rounded up or down. (Answer is that it would be rounded down to the nearest share).

AGM Proper

After the CFO’s briefing, the Board trooped in with their suits and took their seats. Mr. Priyush Gupta the new CEO was there as well as the other Board members. During the AGM, Mr. Koh Boon Hwee outgoing Chairman led most of the session in going through each item on the agenda.

My impression was that Mr. Koh was quite open and friendly to the shareholders. He even knew some of the shareholders who I believe are regular AGM attendees and who would “grill” him in previous AGMs based on the banter between him and them.

However, his adherence to the script in moving the meeting through the agenda items was flawless and gave shareholders every opportunity to ask questions before each vote was taken.

Given that DBS’s results were reasonable given that 2009 was a tough year due to the recession and after-effects of the sub-prime fiasco, shareholders were possibly less combative as last year judging on the comments made by Mr. Koh.

When it came to the item of his $4.5m special renumeration due to him stepping in as interim CEO before Mr. Priyush Gupta was appointed, Mr. Koh passed control of the meeting to the Chairman of the Compensation and Management Development Committee Mr. Kwa Chong Seng to take the matter through the meeting. All motions were passed during the AGM.

Learning Points

I realised that AGMs are attended by mostly retirees and some working adults. There was hardly anyone below 25 in the room based on my casual scanning of the DBS Auditorium. The questions asked by the shareholders ranged from strategic ones relating to how was DBS’s China strategy developing and why Vietnam’s operations contributed so little.

There were also questions or feedback on service levels of DBS hotlines, ATMs etc. Specific questions on scrip dividend mechanics were also raised. There were also questions on whether DBS should consider trading in smaller lots e.g. like SIA 200 so that young people can own shares and give feedback to DBS.

I learnt that as a shareholder, it was your right to ask virtually any question so long as it was relevant to the motion at question. Mr. Koh gave fair latitude to shareholders so long as their questions had some relevance to the motion. But he was also very clear that some questions that were clearly irrelevant to the motion should not be addressed as other shareholders would not be concerned e.g. one shareholder who wanted to know how Mr. Gupta would respond to a past incident where he did not get his rights issues alloted through the DBS ATM due to his being shares being purchased using CPF instead of cash and that this fact was not sufficiently disclosed in the ATM.

Perhaps another more valuable point that was gained was the fact that as a shareholder, we actually own a share in the underlying business. This fact is understood at a theoretical level but as a shareholder at the meeting, it sinks into you from the nature of questions asked by the other shareholders.

Going forward, I think attending AGMs (with my good buddy Mr. Q) is an interesting way to learn more about how listed companies conduct themselves with their shareholders and get a sense behind the people who are in the driving seat of the company.

Have you attended any AGMs of listed companies and how was your experience?

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Be well and prosper.

P.S. I didn’t really meet Mr. Koh face-to-face. I only saw him from the comfort and safety of my seat