I do not attend that many shareholders' general meetings and rarely make it to annual meetings (AGMs) unless I am somehow related to a company or there is something of critical importance going on. I do not because, frankly, many are a sheer waste of time. I prefer to read about them a day later.

If something particularly important unexpectedly takes place I check it out as soon as possible by making some telephone calls. In any case, the market is usually closed when such things happen.

I guess the situation in Malta, so far, is still a little bit better than it is in the more developed markets. I also think that in Anglo-Saxon countries the culture is generally more pro-shareholder than on the continent.

Shareholders' meetings I attended abroad proved to be either dreadfully boring or frightfully brief. I look at the agenda for five seconds to see what's the order of business and already the chairman is poking us off. It is usually that sort of thing.

In Malta, some companies still endeavour to make their AGM moderately interesting, usually by showing a promotional video. At least, if even that is boring, you can snooze without too many noticing.

AGMs used to come tailed by a party of sorts but some companies are skipping the compliment. I really don't know what to think about these occasions. Shareholders generally like them though. Parties generally add some warmth to what are usually rather cold meetings.

In a way, I understand why shareholders' meetings finish up this way. Looked at from one side, shareholders' meetings ought to be a meeting of partners where information is distributed rather candidly and one does not try to make people stick too close to what they might have said so that one can have some top-of-the-head thinking and brainstorming.

Looked at from another side - the side which I think eventually dominates all such meetings, as it should - shareholders' meetings are ultimately legal affairs and they have got to be done right and in a manner which, if need be, stands up in a court of law.

If the chairman of the meeting is too easy, some argue, it is very easy for a faction with a vested interest to unfairly attack the company or its management. Actually, the noise level during general meetings is inversely proportional to the company's financial results. The better the results, the more docile the crowd since they would be behind the management and the easier it is to control the meeting. When results are poor, and the management is the culprit, things have a tendency to get rowdy.

Historically, things usually start out rather friendly, as was the case in Malta 15 or so years ago, when the public was being encouraged to part with its money and invest. Eventually, usually after a bad experience, in which a company or a management is attacked either unjustly or too aggressively, the board of directors and management tend to close ranks and the shareholders' meeting becomes a "strictly business" meeting, often bordering on the unfriendly. Anything more than one naïve question from the shareholders is frowned upon.

I have seen both types of meetings and if I have to choose one I would go for a controlled, "legal" meeting which sticks to the essentials and get it over with. Even with such meetings, however, its officers (and the auditor) have got to make sure they do not sound unfriendly. Unfortunately, once an attitude is adopted, it soon tends to get saddled with the appropriate tone of voice and a stick-to-the-essentials attitude often carries with it an officious and sharp manner. It is of course best to combine, as much as possible, a business-like attitude with pleasant manners.

Companies can do themselves a world of good if they use the few hours in which their shareholders' attention is undividedly on them to promote their products, their views, and their aspirations (meaning: share price). It helps a lot if officers show shareholders they are happy to be there and not act too tense. Business never prospers in an unfriendly atmosphere.

Listed companies would do well to combine their AGM day with a shareholders' information meeting. They can call the AGM first and get it over with and then proceed, in a relaxed manner, to the non-statutory information meeting where the chairman, directors and officers would not be constrained and pressured by the legal formalities of the AGM. They would not have to call in the shareholders on two separate occasions, as sometimes happens, nor incur double expense. They should not restrict attendance to the information meeting only to those persons attending the AGM.

The distance between companies and their shareholders tends to increase if the problem is not addressed. Companies are run by managers who have one set of interests while shareholders have a different set of interests, albeit both sets overlap at various points.

Not all managers have the same set of interests, nor do all shareholders. Shareholders might be investing their own money or somebody else's.

But, as the distance between managers and shareholders increases, the latter are ultimately bound to remind the former that, really, they are the owners of the company.

We are seeing this more and more in shareholder activist strategies used by hedge funds and other big investors to force out bad management and spruce up company performance.

Shareholder activism, though, is part of corporate history and tends to perk up when profits or the share price are going nowhere, when shareholders feel that management are treating them badly and have hijacked the company for their own purpose, and in countries where shareholders' rights are recognised and given due importance.

Like anything else, shareholders' activism can be abused, and sometimes it misfires, but it is generally a great force for the good and one of the foundations of a well-functioning market economy.

Unless they are treated as owners and transparency reigns, who would go and give away hard-earned money to others by investing in companies? If there is no trust, there would be no investment, no stock and other investment exchanges. For these reasons, we have recently seen various regulatory and other initiatives meant to ensure that shareholders are really treated as the owners of the company.

Locally, for example, the MFSA has recently published suggested revisions for the code of corporate governance first introduced in 2001 to ensure that company stewardship is carried out according to rapidly developing international standards.

Internationally, a lot of attention is being paid not only to corporate governance in general but specifically to executive compensation. It is clear that, in certain instances, executives are rewarding themselves rather too amply, stealing companies (and investors) blind.

While talent has to be rewarded, shareholders have to find equitable ways to negotiate compensation and not let managers decide on their own compensation. Thus the setting up of compensation committees within board of directors but, even here, actual corporate practices leave much to be desired.

The EU has recently proposed a draft law to make it easier for shareholders, especially those not resident in the same state as the company, to exercise their rights, e.g. by voting via e-mail and proxies.

All this goes to recognise shareholders as the ultimate owners of business.

Mr Azzopardi is managing director of Azzopardi Investment Management Limited (www. azzopardi.com) which is licensed by the MFSA to provide investment services, including stockbroking. This article is only meant to provide information, which the writer believes to be accurate at the time of writing, and is not intended to give investment advice and its contents should not be construed as such