Bad AGMs (and how to avoid them) - January 2017
Charles Russell Speechlys were pleased to team up again with the Quoted Companies Alliance and ICSA for our annual mock AGM and evening of essential tips to help avoid those difficult AGMs that no one wants to experience. It covered what to do if issues arise, as well as other areas to consider in preparation for the 2017 ‘AGM Season’.
To read our Case Study Notes setting out the mock AGM scenario and our suggested solutions and guidance, which will be useful when considering difficulties which could arise at your own AGM, please click here.
For a general Guidance Note on how to prepare for and manage an Annual General Meeting, and the key actions after the meeting, please click here.
The event was based around an entertaining mock AGM role play, covering all aspects from the responsibilities of the Chairman, attempts to amend resolutions and how to manage a boardroom dispute with a suspended director that spills over into the AGM. There was more than one unruly shareholder in the room, and as the drama unfolded the team was able to draw out the key issues and best practice when dealing with such demands with the help of live electronic voting. Control was the key theme from the event, both of the AGM itself and any internal and external process.
Preparation is key, and this is something that in-house teams, lawyers and financial PR agencies can assist with. Be clear what can and can’t be discussed at the AGM in advance and make any necessary announcements; ensure any leak announcement(s) are checked and refreshed. Chairmen may not have been in this position before, or only infrequently; following the script on the day can help them avoid any potential legal or regulatory traps.
Suspension of a director
Suspending an employee from their position can, even in the simplest of scenarios, be a sensitive matter and one with competing interests. When that person is a director, there are additional issues that require consideration.
Ensure you have full details of proxy voting ahead of the meeting, particularly if you are proposing a challenging resolution. Remember that shareholders can change their vote at the meeting itself (notwithstanding having already voted by proxy).
Gauging the mood of the meeting
Make sure that the mood of the meeting is taken into account, as well as the legal formalities. It may be for example that a procedural motion to seek the consent of the meeting to an exercise of discretion will help carry the room with you.
Role of the Chairman
The Chairman’s role is to represent the best interests of the company and the shareholders and to ascertain the views of the meeting (those present in person or by proxy or representative). It is important to facilitate the discussion and ensure that the views of the meeting are represented in the voting. Questions can and should be passed on to other relevant members of the board where appropriate; chairmen do not have to field all responses themselves.
Corporate Governance and AGM practice:
David Hicks on +44 (0)20 7427 6647 or at firstname.lastname@example.org
Suspension and other Senior Executive issues:
William Granger on +44 (0)20 7427 1073 or at email@example.com
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