Among the many changes brought about by the Companies Act 2006, there is an interesting one for shareholders concerning the way that companies may distribute annual reports and other statutory documents.

Currently, named shareholders of publicly listed companies must receive hard copies of the annual report and certain other statutory documents through the post. A company may, of course, additionally publish the annual report on its website, but this could not be the only method of communicating results to shareholders. However, the 2006 Act changes that. It states that a company, after amending its Articles of Association or passing a shareholder resolution, may seek each shareholder’s consent so that a hard copy of the annual report is no longer posted, and the website version is the sole means of communication of the results.

This, it should be said, cannot be a majority decision: every shareholder must be asked, and anyone who wants to receive a hard copy in future must still receive one, as before. However, the Act permits an ‘opt-in’ process, whereby shareholders must state that they do wish to receive a hard copy; the website is the default position, and a shareholder who is silent as to preference may be taken to have agreed not to receive a hard copy.

Next Fifteen is proposing a resolution at its AGM on 29^th January 2008 for the relevant change to its Articles.  Accompanying the notice of meeting is a letter to shareholders asking them to let us know if they wish to continue receiving hard-copy documents.  At the same time, Next Fifteen has improved the usability of its online version of the annual report, in anticipation of the greater role it will play.

The potential savings of this certainly look attractive: Next Fifteen has around 600 shareholders, but for a FTSE-350 company, with tens of thousands of shareholders, the savings could be enormous. Even more importantly, the environment will benefit from the reduced number of reports being printed.