Bad AGMs (and how to avoid them): January 2019
Charles Russell Speechlys again teamed up with the Quoted Companies Alliance and ICSA, The Governance Institute, for our annual mock AGM; an 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 2019 ‘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 and covered, amongst other topics, the responsibilities of the Chairman, managing attendees, governance and diversity issues, requisitioned resolutions, amendments to resolutions and dealing with difficult shareholders. As the drama unfolded, the team was able to draw out the key issues and best practice, and offer advice to our Chairperson attempting to keep order over proceedings with the aid of the audience (via live electronic voting). The importance of approaching gender and wider diversity in a positive and considered way and the links between transparency and governance were key themes from the event.
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, make any necessary announcements and consider answering questions via the company’s website ahead of the AGM. 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.
Let attendees know in advance what formalities will be required to be admitted to the AGM. Consider carefully use of the Chairman’s discretion to allow or disallow attendance by shareholders, representatives or others. If difficulties arise during the meeting, make sure that the mood of the meeting is taken into account, as well as the legal formalities.
Transparency and governance
An essential component of instilling trust and confidence in the running of any organisation is the application and consistent demonstration of high standards of governance. We looked at our experience within sports, as a sector particularly exposed to public interest, but this applies to equally businesses in any other sector.
We discussed that board diversity should be about ensuring one has the right people on the board for the particular company, who have the rights skills to understand what it’s doing and where it’s going, have the right mix of experience to properly challenge the strategy, management and financial data, and are sufficiently diverse to avoid ‘group think’. We discussed the difficult issues around measuring and managing policies and targets on diversity, but in the context that diversity has significant positive benefits for companies.
For more information, pleaes contact David Hicks.
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