Bringing technology into the meeting room: Lumi
Lumi is the world’s leading provider of technology for annual general meetings (AGMs), helping listed companies meet their corporate governance obligations. CEO Richard Taylor explains how his business benefits from being both incumbent and disruptor.
Lumi helps listed companies meet their corporate governance obligations. “We have brought technology into the meeting room,” Taylor says. “Our software manages shareholder registration and voting, using keypads or bar-coded poll cards. Our software automatically weights votes based on how many shares people have or their different voting rights and takes account of proxy votes received in advance. The result is displayed back to people in the room in real time. We’ve also now developed a mobile voting solution to support virtual meetings.”
As well as listed companies, the software is used by partnerships, unincorporated associations and other member-based organisations that need to hold meetings. It can also help in the running of all such meetings, for managing Q&A sessions efficiently and producing complete and transparent records of meeting outcomes.
"We started developing this software in the early 2000s, to bring an electronic experience to the meeting room – replacing the old show of hands and then a lot of messing around with spreadsheets afterwards to work out the final results,” Taylor says. “We have grown with the rise of corporate governance and we initially disrupted by bringing technology into the room to make that easier."
After 15 years, Lumi is now the world’s leading provider of the technology. “We are in nine markets and in most we are either the only provider or the main one,” Taylor says. “For example, each of the three main UK registrars uses us exclusively as their meeting technology provider. Overall, our software is used in close to 5,000 shareholder meetings every year. We have people present at several hundred. The same software is used at a small FTSE 250 company where two shareholders turn up to the AGM in a lawyer’s office, and at a huge company where 4,000 shareholders turn up at one of the biggest conference venues in the City.”
Future-proofing through technology
Lumi is future-proofing its business and keeping up with technological advancements by technology innovation, as well as maintaining experience of onsite delivery. “We have teams onsite at some of the larger AGMs,” Taylor says. “But our real advantage is our focus on this very niche sector and the quality of our proprietary technology. The core of the technology is our software application package and the keypads were also developed in house.”
Developments in one market can be transferred to another, particularly as laws underpinning corporate governance change. For example, Lumi had to accommodate a legal requirement in Singapore for the collection of shareholders’ signatures when registering at a meeting – it had to develop a digital capability to do this. “The law has now evolved in France to allow for digital signatures, so this year we will be releasing updated software which allows for tablet-based signatures in the room,” Taylor says. “This sounds like a small thing, but it’s a huge efficiency saving. It means less staff will be needed to run some of the really big meetings. We have developed that specifically for France, but it’s built on what we have already done in Singapore. That technology is also the basis of self-registration in-room, which we should be using in the UK this year or next. That’s one benefit of keeping all development on one platform, which we have worked hard to do. We have kept everything on one platform to allow it to be deliverable, scalable and efficient.”
A key development in the last couple of years has been the rise of the concept of the virtual meeting.
"We have developed a mobile voting solution – which is interesting from a disruption point of view, because that means we are both the incumbent and the disruptor,” Taylor says. “But it’s not a massive cannibalisation because in most cases what we’re seeing is the rise of the hybrid meeting – there’s still a physical meeting, but you are now able to attend remotely as well. So our software allows people to either vote with a keypad in the room, or with a paper poll card that’s then barcode scanned, or via a mobile app – or any combination of the above. So being the incumbent and the disruptor is a good place to be."
In 2015 Lumi managed the first hybrid meeting in the Netherlands (for Royal FloraHolland, the world’s largest flower auction company) and in 2016 managed the UK’s first fully electronic AGM (for Jimmy Choo). It has also run hybrid meetings in Canada, Australia, New Zealand and the US, with more expected in future AGM seasons.
Most markets appear moving towards the hybrid meeting, except for the US and New Zealand, where there appears more interest in going virtual only. This is triggering some public debate, with some opponents arguing the case for retaining physical meetings and wanting directors to have to “eyeball investors”. Taylor believes that shareholders can actually hold boards to account better with virtual digital tools – by opening up the opportunity to ask questions to shareholders who may not be able to attend physical meetings (e.g. because they are at work or live too far away) or lack the confidence for public speaking. But the real issue, Taylor says, is not about whether to hold virtual meetings, but about why companies would continue to support physical-only meetings when a hybrid solution can meet everyone’s needs.
Taylor has no doubt that there will be greater digitalisation in his sector, but thinks that “the hybrid solution is where it’s going in most markets”. He says: “By 2021/22 I think most AGMs will facilitate or promote electronic participation. In five years’ time it will become the norm because it’s a market where everybody wants to do what everybody else does, but not be the first with any change. So at the point where it’s clearly accepted and clearly works, and is legally not problematic, everyone will switch to it and hopefully we will be the main beneficiaries of that.”
Industry: Information Technology
Company size:11-50 employees
HQ: Los Angeles
Ownership: Privately held
The legal issue is an important one, particularly in the UK. As Taylor explains, in some markets, including the UK, the law underpinning corporate governance obligations is a little ambiguous about whether meetings need to be held in a physical “place”. The law therefore needs updating to keep pace with technology. “No one in government would tell you they are not in favour of making electronic participation possible,” he says. “It’s not something the law is there to stop people from doing; it’s just that the law has not been updated yet.” This makes UK companies cautious about fully embracing virtual meetings technology in case, for example, a legal loophole gave an activist investor the opportunity to cause disruption. “But we are the main supplier of this technology in the world,” Taylor says. “And as a UK business, it would be great if it was a bit easier to do in the UK.”
Such frustrations aren’t getting in the way of Taylor’s goals for Lumi. He says: “As the environment for AGMs is going to be more and more open to dematerialisation and a digital future, my goal is for Lumi to be the main player – to help shape the market, and also make it easier for shareholders to discharge their responsibilities as owners and for companies to fulfil their legal obligations and get their message across.”
Managing dispersed operations
Lumi now has a headcount of around 70, with employees spread across nine countries.
"In terms of how we operate our business, we are incredibly digital because we have to be,” Taylor says. “Our international presence is one of our biggest competitive strengths, because we take learnings from one market into another. But from the point of view of our own internal operations, it’s a real challenge – to have relatively few people spread over many different offices and locations. So all of our operational systems are cloud based."
Lumi also uses collaborative meeting tools and services, such as GoToMeeting and Meetoo, to help its staff members communicate. “Some of the meeting tools we use are key for maintaining a common esprit de corps and making communication effective in both directions,” Taylor says. “For example, employees can raise questions and communicate anonymously, which makes for more real feedback, good and bad. As the person responsible for everything, I want to hear it.”
Lumi was one of the first wave of technology companies to be selected for Future Fifty, the Government-backed fast-track programme to support UK high growth businesses. “That was good for networking and for getting us a lot of profile,” Taylor says. “It’s a good example of what government can do [to support innovative businesses].”
The company’s growth is now driven by three core factors: the move towards greater digitalisation of meetings, expansion into new geographies, and growth outside the listed company market among entities such as associations and membership organisations (such as Amnesty International, the Co-op and the International Olympic Committee).
Taylor says the biggest challenges faced so far in growing the business have concerned “choices around development”. He explains: “You make decisions about where you think the market will be and where demand will be. The reality can change very quickly, but development is by definition slower. So you have to make a call on what you are going to develop with limited resources. That’s always a challenge. You can spend time on something that turns out not to be as important as other things. But one of the biggest advantages of being focused on a niche area is that we know a lot about it so are in a good position to make those calls. And because so many markets use our technology and are largely dependent on it, the things we do tend to shape where it goes.”
"We asked: Away from Lumi, what disruptive tech has most impressed you…
“Blockchain is really interesting,” Taylor says. “The link to us will be in terms of identifying who the shareholders are.” Shares or voting rights could be seen as a kind of crypto-currency. “So it won’t change the need for a meeting and the decision making,” Taylor says, “but how people get to it – in terms of how are identified and authenticated. I could see blockchain having a big impact there in the medium term.”