Thursday, July 2, 2009

Safaricom Moves to Cut Cost of AGM

Kenya's largest mobile operator Safaricom is moving to cut the costs of holding its Annual General Meeting.
The mobile firm's roster of over 800,000 shareholders — the largest number in corporate Kenya's history — has pushed it to identify cost-cutting measures during AGMs.
Chief among them is doing away with the usual free lunch, transport and branded giveaways, which perks have become synonymous with the meetings.
Safaricom will also heavily rely on technology to deliver essential communication such as annual reports and dividend payments in order to cut down on printing and postage.
"Our research has revealed the trend among shareholders in this country is to treat AGMs more like a social gathering rather than an opportunity to engage the management of the company on key issues.
Our initiative will have ramifications for other companies who face the same problem," said Les Baillie, Safaricom's chief investor relations Officer.
Safaricom hopes to drive down the total cost of its AGM to just KSh20 million, saving over Ksh350 million by cutting spending on non-essential elements.
The company will depend on a mix of technology and employ cost-cutting measures to pull-off what will be the largest gathering of shareholders in the country's history at Kasarani Stadium in Nairobi on August 19.
Although Mr. Baillie said his firm had projected just 30,000 shareholders would attend the AGM, budget proposals undertaken by the firm revealed that it would have to spend colossal amounts using the traditional means.
"Our highest cost will now be security and we shall hire 400 more people to handle the event. We encourage our shareholders to adapt to our options of receiving communication and dividends which include using the Internet and M-Pesa," said Mr. Baillie.
Companies spend millions of shillings communicating with shareholders ahead of the AGM.
Kengen, one of the company's with big shareholder registries has in the past spent over Ksh25 million on annual reports alone, using a further Ksh17 million on postage to 250,000 shareholders.

No comments: