Ian Dunlop knows first-hand how powerful an annual general meeting can be in setting the corporate agenda.

Last year, Dunlop – a former Shell executive – ran for the BHP Billiton board. It was a high-profile campaign with a gripping narrative – for Dunlop, the former chairman of the Australian Coal Association, was running on a climate change platform, arguing the company was not doing enough to manage the risks posed by growing carbon emissions.

Dunlop's tilt was unsuccessful. He garnered just 4 per cent of shareholder votes, but he attracted the attention of investors and media in Australia and overseas. Confirming to BusinessDay that he would be running again this year, Dunlop said he was "encouraged" by BHP's actions in the 12 months since his campaign.

"As companies get bigger, and institutional investors get bigger, the whole system becomes more complex, and the ability for the small shareholder to have his voice heard gets harder and harder," Dunlop says.

"This is testing the position of the company and the board. It's very important to be able to do that."

As this year's round of annual general meetings kicks off, building to its climax in October and November, debate is simmering about the future of the yearly rituals of argy-bargy and biscuits.

Once upon a time, the annual meeting was where most shareholders physically cast their votes on matters such as the re-election of directors. These days, such votes are almost always lodged and decided well before the formal meeting, with institutional investors holding the clout – with votes from the floor of the mostly retail investors at the meeting drowned out.

Annual meetings' most outspoken critics include the Governance Institute, representing company secretaries, which claims they have become outdated relics.

"When the AGM was invented, it was in an era of horse and carriage, pen and ink," says Judith Fox, the Governance Institute's national director of policy and publishing.

"Now you have companies like Telstra, with 1.5 million shareholders. They are huge in number, and geographically dispersed."

The annual meeting's supporters include the Australian Shareholders Association, which represents retail shareholders. It argues they provide small shareholders with their only chance to engage with company boards and management directly.

For his part, Dunlop believes AGMs are a "vital" tool for shareholder engagement.

"You need an open forum where there can be discussion, where shareholders can raise issues," he says. "Yes, you can look at things like voting online. But you still need to really be able to get the feel for what a company's about. That sort of opportunity is still very important."

Annual meetings were once a cornerstone of the corporate calendar, where throngs of investors – many of them self-funded retirees – would gather to hear the chairman's speech, ask questions, vote, then sample sandwiches and tea, and mingle with the board.

But attendance levels are dwindling. Figures compiled by the Governance Institute show that just 0.5 per cent of shareholders attended the annual meetings of big Australian companies last year, down from 1.5 per cent in 2007.

And it's not as if shareholders are tuning in at home. While 60 per cent of big and medium-sized companies are now webcasting their annual meetings, on average just 208 shareholders tuned in to each.

The Governance Institute had hoped that the issue would be pushed along by a highly anticipated report from the government's Corporations and Markets Advisory Committee, made up of academics, lawyers, regulators and other experts.

CAMAC had been working on the issue of the future of annual meetings for some months, with one of its main tasks to assess how annual meetings could be updated to adapt to new technology.

But the report is now in limbo, and unseen by the public, after the federal government axed CAMAC as part of federal budget cuts. Its work has been passed on to Treasury.

The Governance Institute had pushed the case to CAMAC for an overhaul of the annual meeting that would see shareholders vote on remuneration online and ask directors questions at a more informal investor briefing.

Fox says the role of the AGM had been outpaced by technology, and that low-key "investor briefings" such as the ones held by Telstra attract far more shareholders than AGMs.

"This idea that the AGM is where decisions get made is a fiction," she says.

"The information that gets discussed at the AGM is completely old and out of date. In the world of continuous disclosure, anyone can go onto the ASX platform and keep track of a company on a daily basis."

But Ian Curry, chairman of the ASA, says annual meetings need to be improved, not axed.

"We do need to revitalise the AGM, not in their formal aspects, but their informative aspects," he says. "We'd like to make them more shareholder friendly."

Martin Lawrence, a governance analyst at proxy advisory firm Ownership Matters, acknowledges that for institutional investors, "the actual event of the AGM itself is not terribly relevant".

For the small retail shareholder, however, they provide an opportunity to "actually eyeball the people who run their company". "That is an opportunity they don't get anywhere else," he says.

"We are open to ideas to make them better and more efficient, and make more people go. They're not perfect, but they fulfil a very important role, and whatever happens, that needs to be retained."

While all voices are heard, it is the big institutional investors such as banks and super funds that ultimately have the power to steer Australia's biggest companies.

Increasingly, they are being urged – by their own members, activists, or both – to become more involved in company votes and to take stands on matters relating to corporate governance and the environment.

Aaron Bertinetti, a governance expert at CGI Glass Lewis, says a trend being witnessed at annual meetings is the growing clout of super funds which, traditionally, have outsourced their voting decisions to proxy advisers.

"What we are seeing is the clawing back of industry super funds, in particular, of voting rights," he says.

He says boards need to make a far greater effort in engaging with the funds, rather than fund managers. "It's a trend that's only going to continue."

Governance expert Ulysses Chioatto says boards will also have to get used to a greater amount of environmental activism, as groups such as GetUp! become more savvy in lobbying companies. Environmental protests have been a fixture of annual meetings for companies such as BHP Billiton for years, and groups such as Friends of the Earth and the Australian Conservation Foundation have used small shareholdings in companies for the right to question boards at annual meetings. Dr Chioatto expects such activism will only increase.

"There's going to be more action with Woolies and pokies machines, and there's going to be more action around fracking," he says. "The [activist] groups are going to get smarter in how they do it."