In the spring of 2023, Finnair, with assistance from Inderes, held its first in-person Annual General Meeting in three years. I had the opportunity to meet with their team and conduct an interview about the event. What initially started as a conversation focused on the Finnair 2023 AGM evolved into an engaging discussion about the current landscape of shareholder engagement and the future of AGMs.
I was warmly welcomed by Finnair's VP of Risk & Compliance, Terhi Turpeinen, the Director of Investor Relations, Erkka Salonen, and the Compliance Officer, Anna-Maria Järveläinen, at the impressive Finnair headquarters, which boasts a stunning view of the newly renovated Helsinki Airport. This airport, originally constructed for the 1952 Helsinki Olympics, has been Finnair's home base ever since.
For the Finns, the Finnair brand is nothing short of iconic. Finnair has served as our gateway to the world, introducing us to new cultures and ensuring us safe travels for decades. Today, Finnair stands as one of the world's most trusted airlines, with its "blue and white wings" carrying over nine million passengers to and from Helsinki each year.
Finnair, founded under the name Aero in 1923, is now a century old, making it one of the oldest aviation companies globally.
The company initially commenced operations by flying mail between Tallinn, Estonia, and Helsinki, employing a single seaplane. During the summer months, when the waters were open, it would alight on the sea, while in the winter, the pontoons were replaced with skis to facilitate landings on the sea ice.
Subsequently, the first passenger route was established, shuttling passengers between Helsinki and Stockholm. The era of seaplanes came to a close in 1936, with all flights thereafter departing from conventional airstrips.
In 1949, Finnair became a member of the International Air Transport Association (IATA) and received the airline code AY, a designation that still distinguishes Finnair flights on airport screens worldwide.
Finnair has been a pioneer in various aspects of aviation. It was the first smaller airline to transition to the jet age in 1960. Additionally, it earned recognition as the first Western European airline to begin flying direct to Bangkok (1976), Osaka (1983) and Beijing (1988), and the first Northern European company flying to Shanghai (2003).
Finnair was listed as a public company to the Helsinki Stock Market (OMXH) in 1989.
Before 2020, Finnair, in addition to majority state ownership and institutional investors, had roughly 27 thousand retail shareholders. However, following the turbulence in the stock market caused by the COVID-19 pandemic, Finnair saw a significant increase in its retail shareholder base, with the number rising to over 117 thousand. This transformation has made Finnair shares a kind of ‘household stock’ for Finns. Consequently, this influx of new shareholders has prompted a renewed focus on catering to the needs of retail investors.
I sought to gain a deeper understanding of the significance of the Annual General Meeting (AGM) for Finnair, particularly in light of the years of the pandemic and the resulting social isolation.
"Undoubtedly, it holds great importance for us, especially considering the growing number of retail investors. We saw this as an opportunity to host a physical event in a proper venue," Erkka Salonen explains.
"From a psychological perspective, it carries immense meaning to meet our shareholders face-to-face. We have shareholders who prefer attending in person, and it was crucial for us to cater to both physical and remote attendees," adds Terhi Turpeinen.
Interestingly, however, the increase in shareholders was not noticeable at the event. Despite the recent stock investing trend that brought about tens of thousands of new investors, AGMs don’t seem to attract investors like they did prior to the pandemic.
"It didn't unfold quite as we anticipated. This trend has been observed in other companies as well, where AGMs no longer draw the same crowds as they did before COVID-19, despite growing shareholder numbers," Salonen notes.
"Perhaps the younger generation of shareholders seeks to exert their influence through different channels – such as social media and continuous real-time interactions. Making an impact through the AGM is becoming increasingly rare. I believe that the mechanisms for younger shareholders to make an impact are evolving," Turpeinen reflects.
As the stock market gradually returns to a semblance of "business as usual" concerning organizing Investor Relations events, a question emerges: How can we effectively engage the younger shareholders who have joined the ranks of stock pickers in recent years?
"AGMs have traditionally been gatherings for slightly older generations. It will be intriguing to observe whether, with the growing prevalence of virtual events, we see a shift in participation patterns, possibly attracting more younger shareholders," Salonen contemplates.
Finnair extended its AGM reach by enabling remote participation through Inderes' virtual event platform, Videosync. However, this online setup lacked interactive features and online voting, both of which are available in Inderes' full virtual AGM package. The decision to include remote participation was driven by the desire to accommodate Finnair's vast shareholder base, which exceeds 100,000 individuals.
"We aimed to ensure broad shareholder access to the meeting, recognizing that not all shareholders could attend in person," explains Turpeinen.
Salonen underscores the importance of embracing modern trends, anticipating a shift towards more remote participation. "We want to serve as many shareholders as possible, which is why we included a remote option," he adds.
Looking ahead to Finnair's 2024 AGM, the remote coverage aligned with dwindling in-person attendance. While various factors may contribute to limited online engagement, the absence of online interaction options could be a key factor. Nonetheless, Finnair's team appears committed to digitizing investor relations. Is the company considering adding interactivity, such as online voting, to enhance remote participation?
"Early voting streamlines a lengthy event, and we plan to continue offering this option. However, we approach the addition of online voting cautiously, assessing industry trends. We must ensure it functions seamlessly," Salonen notes.
Turpeinen emphasizes the importance of maintaining a seamless AGM process, with no interruptions. "Incorporating online voting requires absolute certainty of its functionality," she stresses.
Salonen concludes with a forward-looking perspective, anticipating a future where fully virtual AGMs become mainstream.
"Whether it happens next year or within a few years, we'll be ready to embrace the most effective solution," Salonen affirms.
Finnair's AGM journey in 2023 reflects the evolving landscape of shareholder engagement. The company's iconic status in Finland has been further underscored by a surge in retail investors, indicative of the changing dynamics in today's market.
The AGM, once a bastion for traditional engagement, now faces a shifting demographic of shareholders, including a younger generation with alternative channels for influence. As digitalization continues to reshape investor relations, Finnair's embrace of remote participation signals a proactive stance in serving a diverse shareholder base.
The path forward is one of adaptation and innovation, with contemporary requirements affecting investor relations processes. Amidst the changes, Finnair appears steadfast in its commitment to serving shareholders, regardless of the form AGMs may take, ensuring a seamless and inclusive experience for all.
Need to organize an Annual General Meeting?
Inderes helps hundreds of Nordic listed companies annually in organizing classic, hybrid and virtual AGMs. Our team of experts handle everything from early voting to live production with quality and precision, covering all regulatory needs. We operate in Finland, Sweden and Denmark.
Contact us here