UK Individual Shareholders Society
ATTENDING, VOTING AND SPEAKING AT GENERAL MEETINGS OF COMPANIES
If you want further advice on this topic, please contact ShareSoc.
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Shareholders who are on the register of a company (i.e. are “members”) can attend and vote at General Meetings. Alternatively if you have obtained a proxy from someone else that appoints you as their representative (for example a nominee account operator) which has been submitted to the company in advance, or has a “letter of representation” from a shareholder on the register, then you can also attend and vote. See this page of the ShareSoc web site for more details of how shareholders are recognised for voting purposes: Nominee Accounts .
Some discussion of how you might use your votes at an Annual General Meeting is given on this web page: Voting at General Meetings .
Voting often first takes place on a “show of hands” basis because that saves the effort of conducting a poll, particularly as most resolutions are passed by very large majorities at most General Meetings. However it is at the discretion of the Chairman of the meeting whether to skip the “show of hands” stage and go straight to a poll – this tends to happen at large companies where they have instituted some “automated” voting system at the meeting, but is generally to be deplored. The advantage of a “show of hands” vote is that it shows the mood of the meeting, after questions have been taken and speeches made.
However, if the show of hands vote is not obviously decisive, or if the Chairman of the Meeting has other reasons to do so, he can ask for a poll to be carried out. In addition shareholders can demand a poll. This usually requires a few individual shareholders (the number is defined in the “Articles” of the company but is usually often less than 10, and can be as low as three), or by a certain percentage of the vote, e.g. one or more shareholders who together hold 10% or more of the shares.
This situation arises quite often and it is unfortunate that shareholders frequently do not realise that a poll is not a complex matter (and hence do not support doing one), when it can take just a few minutes. It just requires poll cards to be issued to those present at the meeting, and the votes recorded on them to be added to the proxy counts (which will already have been totalled anyway). It is not necessary of course for those who have previously submitted a proxy form to fill out a poll card. So if you intend to “demand” a poll, make sure you have 10% of the shares or at least a few people to support you in advance.
You can ask for a poll at any time, but it can be simplest if you really want one just to advise the Chairman at the start of the meeting that you are demanding a poll on all resolutions.
Note that if the Chairman says “it is unnecessary” because the proxy votes suggest it would be lost, you should insist one should be undertaken for two reasons: 1) You do not know if there are some people in the meeting who have not submitted a proxy vote beforehand; and 2) Those in the meeting who have previously voted via proxy can change their vote at the meeting by filling out a poll card. If a poll is demanded, and the required number of shareholders support it, then the Chairman legally has no alternative than to execute a poll.
The poll is usually conducted by the company’s Registrar who is usually present at most General Meetings, but may be undertaken by the Company Secretary in very small companies. It is not possible to see how people have voted or to challenge a vote declaration (at least not unless you have very good reasons to do so and that would probably have to be done later).
The results of the poll are usually declared as soon as possible (i.e. after the end of the Meeting). If the vote takes a long time, the Meeting might be adjourned for an hour or two to await the count results, or very exceptionally a declaration made the following day.
Note: do not assume that company Chairmen understand these rules. They often do not. For example the writer of this article has attended meetings where the Chairmen did not even take a show of hands vote on resolutions because he assumed the proxy votes were sufficient to be conclusive. This is incorrect and would be a breach of Company Law in most cases. It’s worth taking a copy of the company’s Articles with you to General Meetings in case of dispute – these can always be obtained from the Companies House web site for a nominal fee (usually £1 at the time of writing).
So the key things to remember are:
1. Keep these rules in mind when attending General Meetings where there are likely to be contentious issues debated, or votes may be a close run thing (or polls demanded).
2. Make sure any shareholders who intend to demand a poll are coordinated, know who is going to call a poll, and who is going to support it – plus of course obtain a view of whether there is some chance of success in winning the votes.
But even if the vote might be lost, calling a poll ensures that all votes are counted and declared so significant opposition is demonstrated. Giving out proxy votes alone (for which there is no legal obligation, although it is recommended) does not necessarily show the full picture.
There is a web page here which covers the question of how to obtain the voting results at General Meetings: Obtaining_Voting_Results
Asking questions and speaking
Chairmen of General Meetings sometimes wish to defer all questions to the end of
the meeting but if you have questions on any of the Resolutions (for example queries
on the Report & Accounts), then they should be taken before the resolutions are voted
upon, so you should resist any suggestion to leave questions to the end. In addition
it is worth pointing out that you have the right not just to ask questions but to
speak on any matter in relation to the affairs of the company. However, the Chairman
has the responsibility to ensure an orderly meeting that does not last excessively
long so he/she would be right to reject repetitious questions or questions that do
not relate to the affairs of the company or are not relevant to shareholders. Shareholders
should try to restrict themselves to one or two questions, that are brief and to
the point. Don’t make long speeches which will tend to bore other shareholders present.
Detail technical questions (on the accounts for example) are best submitted in advance
and perhaps dealt with separately. General Meetings are more like theatrical events
that enable directors to answer shareholders questions, and sense their mood, than
debating forums -
Any formal resolutions you wish to put on the agenda of a meeting need to be proposed well in advance (in general you need 5% of shareholders to support a resolution requisition for an AGM, or 10% to requisition a special or “Extraordinary” General Meeting). Consult ShareSoc if you need advice on these procedures.
How General Meetings Should be Run
In 2013, ShareSoc published a twelve page document providing guidance on how to get the most out of a General Meeting of a company, both for shareholders attending and those managing or Chairing such events. It is present here:
Reports on AGMs
ShareSoc publishes many reports on AGM proceedings on its Members Network and encourages its Members to write such reports and submit them. A monthly prize is offered for the best report. See Company Reports for more information.
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