A summer of shareholder discontent can test AGM procedures

United Kingdom
This year's AGM season has seen some high profile shareholder meetings. As the summer of shareholder discontent continues there has recently been news of requisitioned EGMs.

For those doing a final check before the meeting there is a list of practical issues (see below) that the chairman will expect you to have considered before the AGM.

This year he may also want you to confirm that you have complied with the new rules on financial promotion, when dealing with questions from the floor.

For those company secretaries relieved that their AGM has passed off smoothly, there is now the prospect of a shareholder vote on directors' remuneration next year (see announcement below). The draft regulations are due out this month. The manuals will need to be updated.

CHECKLIST

Practical issues to consider

  • Venue
  • Security arrangements (using the Company’s own personnel)
  • Guests - approval, removal and questions
  • Overflow room
  • Hand count
  • Admissible/inadmissible motions from the floor
  • Verification of poll demand
  • Exercise of discretion by proxies
  • Amendments to resolutions (including criteria for accepting or rejecting)
  • Hecklers and protesters
  • Timing of polls
  • Closing the debate
  • Security alerts
Chairman's script

  • Proposal and voting on resolutions
  • Poll demand by Chairman
  • Poll demand from floor
  • Proposal of new directors or Chairman
  • Adjournment by Chairman
  • Adjournment motion from floor
  • Immediate poll
  • Poll at end of meeting
  • Deferral of poll
  • Refusal/acceptance of amendment and proposal of motion to amend and of amended/unamended resolution
  • Poll on the above items
  • Motion of no confidence
  • Closing the debate.
Relevant Articles of Association

  • Multiple venue
  • Chairman's power to adjourn
  • 48 hour rule for amendments
  • See under “Electronic notices and proxies”

Proxy Cards

  • Compliance with guidelines

Electronic notices and proxies

  • Invitation to use electronic communications
  • Publication of accounts on a web site
PRESS RELEASE - P/2002/397 - 25th June, 2002 - “Changes to reporting on directors’ pay”

Press release announces that the Government has introduced into Parliament legislation to amend CA 85 to require that listed companies publish a report on directors' pay as part of the annual reporting cycle and hold a shareholder vote on directors' remuneration at each AGM. The report will have to disclose details of individual directors' remuneration packages and justification of any compensation packages given in the preceding year, details of the board's consideration of directors' remuneration, membership of the remuneration committee, details of any remuneration consultants used, and a statement of the company's future policy on directors' pay and company performance graph. It is intended that the Regulations will come into force before the summer recess of Parliament 2002, and that they will apply to listed companies with financial years ending on or after 31st December, 2002. It is understood that the draft Regulations will be published in early July, 2002.
In light of the above, many organisations have been carrying out reviews of their AGM procedures and we have advised several clients on their review, on a fixed fee basis. If this would be of interest to you, please contact either Andrew Crawford at andrew.crawford@cms-cmck.com or on +44 (0)20 7367 2867 or Simon Howley at simon.howley@cms-cmck.com or on +44 (0)20 7367 3566.