Notice of Adjourned Members Meeting

Adjourning the AGM

A company should only consider adjournment if it has issued its AGM notice and does not have postponement provisions in its Memorandum of Incorporation. Generally, a quorate meeting is required to be held in order to enable an adjournment.

However, the MOI will often permit greater flexibility, allowing, for example, for adjournment for lack of quorum. The adjourned meeting must be held within six months of the company’s financial year end and so companies with a 31 December year end will have relatively little leeway.

Adapting the AGM

While the Chartered Governance Institute’s initial paper included a number of matters to be considered when adapting an AGM in the light of the current pandemic, the updated paper provides more guidance in the light of the Government’s compulsory 'Stay at Home Measures' prohibiting, among other things, public gatherings of more than two people.

While postponement of the AGM is an option, companies may need to ensure that their standing share capital authorities (as granted at their 2019 AGM) are refreshed before they expire.

For certain companies, the ability to raise working capital by utilising such authorities may be crucial in the coming months. This may determine, in part, whether a company takes advantage of any relaxation of the timeframe within which an AGM must be held, as it seems unlikely that any change to current legislation could extend the duration of shareholder-sanctioned share capital authorities.

Also, companies may need to hold a general meeting on an urgent basis to approve a capital raising or other urgent transaction.

Recognising the necessity of being able to hold a valid general meeting issues like these while the ‘Stay at Home Measures’ persist, the updated guidance proposes an approach for companies who do not wish or are not able to postpone their AGM.

It recommends that companies encourage shareholders to vote by proxy and that they make it clear in the notice of meeting, RIS announcement or by updating the information on the company website where the notice of meeting has already been published, that public gatherings of more than two people are not permitted and stress that anyone seeking to attend the meeting in person will be refused entry.

The guidance also offers advice on:

• how to ensure that the meeting is quorate;
• who should chair the meeting;
• which directors will be allowed or expected to attend the general meeting;
• where to hold the meeting in the event of the planned venue being unavailable or otherwise inaccessible.

Ensuring the meeting is quorate

The quorum for a general meeting is typically set out in a public company’s MOI (or is determined to be two members present in person or by proxy as determined by the Companies Act).

This quorum may be satisfied by two director and/or employee shareholders of the company attending the meeting, with resolutions being passed by the proxy votes of those who have not been able to attend in person (or by appointing one of those employees as a corporate representative) and the votes of those in attendance. This might be achieved by, for example, an executive director and the company secretary being present at the general meeting, provided that each is a member, a corporate representative or appointed as a proxy.

The fact that their presence is necessary in order for a quorum to be formed means that their presence is 'essential for work purposes' (and therefore permitted), especially given they are both employees and the company needs to deal with the business of the meeting.

All, or almost all, companies should be able to form a quorate meeting in this way.

Who should chair the meeting?

The MOI will determine who chairs a general meeting. They typically provide that the chair of the board or, in the absence of the chair of the board, another director shall preside as chair of the meeting. It may be helpful for a director to attend as part of the quorum so that it is clear who shall act as chair of the meeting.

Alternatively, the MOI may allow for any member to be elected to act as the chair of the meeting by a resolution of the company passed at that meeting.

To make sure that the chair of the meeting can exercise all proxy votes submitted, companies should make sure that the form of proxy appoints the chair of the meeting (and not the chair of the board or a specific director who may on the day be unable to attend).

Which directors should attend?

There is no legal requirement for directors (other than those whose presence may be required to form a quorate meeting as described above) to attend a general meeting and their attendance would not be permitted under the Stay at Home Measures.

It would, however, be possible as an option for them to dial in to the meeting if the company considers that this is helpful for running the meeting, although it is not required.

Where to hold the meeting?

Companies that have already convened a general meeting for a venue that has since become unavailable will need to find an alternative venue. If the company’s MOI allow the board to postpone the meeting or move its location to an alternative venue, they should consider exercising this power to move the meeting to a more controlled venue, such as the company’s head office.

While some companies may ordinarily have security concerns (especially if their general meetings are normally very well-attended or if they operate in contentious sectors), the fact that the meeting may be held behind closed doors should mitigate these concerns.

Companies that do not have an MOI which enables them to postpone their meeting or switch to an alternative venue should, in law, adjourn the meeting from the planned venue to an alternative venue. Where this is not practicable, companies should take advice on the best course of action in the circumstances, while always preserving the safety of the individuals involved.