Research Question/Issue: The study examines the information content hypothesis of annual general meetings and its evolution in the UK.
Research Findings/Insights: Using over 14,000 hand-collected annual general meeting dates of UK firms over the period 2004 to 2014, the study provides evidence in support of the information content hypothesis from the analysis of price and volume reactions. In addition, the study finds some support for an increase in the information content of annual general meeting using abnormal returns as our proxy for information content. However, we find no support for a change in the information content of annual general meeting from our analysis of abnormal volume.
Theoretical/Academic Implications: The study provides some support for the indispensability of annual general meetings based on the information role it performs to the investing public in reducing information asymmetry. The information emanating from annual general meetings seems to result in changes in investors’ expectations and idiosyncratic preferences as reflected in changes in prices and trading volume, respectively.
Practitioner/Policy Implications: The study supports the idea that annual general meetings continue to be relevant as a means of disgorging relevant information to the investing public even in the age of information technology and seeming increase in the quantity and perhaps the quality of financial information available to the public before annual general meetings. The evidence in this study does not seem to support the recent call for dispensing with annual general meetings for failure to meet their corporate governance and informational roles.