Running a general meeting, including an annual general meeting, can take a lot of work and preparation but, for most people it is something they only do infrequently. In this guide, our experts share their experiences to offer some tips for Chairs and company secretaries on how to run an annual general meeting or general meeting.
We have focused on UK listed companies and AGMs as these are generally the most involved types of general meeting; however, a lot of the advice would still be applicable to an unlisted company, a charity or a membership association and other general meetings.
Note: As a result of the Covid pandemic, virtual and hybrid meetings are now much more common and this adds even greater complexity to running a general meeting. We have published some guidance if you are amending your articles to allow virtual general meetings. We will also soon be publishing a guide to some key considerations when hosting a virtual or hybrid general meeting. In the meantime the Chartered Governance Institute have published their advice.
The different types of meetings explained
Although there are several sources online covering the basics of general meetings, our company secretaries pointed out that some of it is now out of date. For clarity, here is the latest position:
- The term extraordinary general meeting (EGM) is now generally defunct in the UK. Under the Companies Act 2006 meetings can either be an annual general meeting (AGM) or a general meeting (GM).
- The annual general meeting is a form of general meeting held every year, typically when the accounts are presented to the company members. A general meeting, what used to be known as an EGM, is any other meeting of the company members that is not an AGM.
- Since the Companies Act 2006, private UK companies do not have to have an annual general meeting (unless it is required under their articles of association or it is ‘traded’). However, public companies do still have to hold an AGM within six months of their year-end.
The role of the chair at the AGM or General Meeting
The company’s articles should set out who will be the Chair of the AGM/GM. Usually, if the directors have previously appointed a Chair, that person would Chair general meetings. In our experience 9 times out of 10 this is the case. If the Chair of the board is not present, then normally one of the other directors would be entitled to chair the AGM/GM. If no directors are present (which is rarely the case), the appointment of the Chair is the first business of the meeting. The Chair normally must be a member/shareholder of the Company (or their representative).
It is the responsibility of the Chair to ensure the AGM/GM is conducted efficiently, effectively and in accordance with the company’s articles. In large organisations it will typically fall to the company secretary to prepare the chair for how to run the AGM. When we’ve provided company secretarial services for organisations, we would usually brief the Chair on:
1. Their duties by UK law but also under the company’s articles.
2. Guidance on proceedings, including how questions will be taken.
3. Instructions on how voting takes place.
4. Adjournment of meetings.
Typically, points 2-4 can be covered off for the Chair in a Chair’s script, which would also include opening and closing statements. Votes cast in advance via proxy would normally be included in the script as well. The Chair would then deliver this at the AGM/GM ensuring that shareholders are adequately informed on how to participate.
The role of the company secretary at an AGM/GM
If the Chair is accountable for the smooth running of the meeting, we would usually say the company secretary is responsible for making it happen. As well as developing the Chair’s script, typically, the organisation of the general meeting falls to the company secretary. Here’s some advice on how to run an AGM:
As with all forms of events, failing to plan is planning to fail. We would typically consider the following areas.
- Context – what is the wider context for this general meeting, can you anticipate certain challenges or issues?
- Contingencies – put in place appropriate contingencies to deal with issues with the venue, technology, absences, and security. Also, consider how to deal with any last-minute amendments to resolutions which might need to be decided by the chair on the spot? Review the articles and act in good faith. This is where having expert advice in the room is critical.
- Roles – the senior team should be clear on who is doing what. Everything from who enters first to who speaks when and answers which topics.
- Rehearse – Once roles are clear it’s time to rehearse. General meetings, by nature, are key events and bring with them pressure. An organisation’s senior team are undoubtedly busy and sometimes there is a temptation to skip rehearsals.
It’s useful to consider the event from the viewpoint of the attendees rather than the organisation.
- Voice – On any matter, shareholders must be allowed to share a view. Consider the order that shareholders are allowed to speak and the order topics will be discussed. Do they require any technology to aid participation?
- Venue – The venue needs to be large enough to accommodate all shareholders, failing to do so could risk declaring the meeting void. It is worth also considering accessibility, transport, and cost.
- Voting – generally, each resolution will be voted on separately. How will voting take place, show of hands? By poll? Best practice nowadays for a listed company is to have all resolutions voted on by poll.
- Experience – consider mapping the overall journey from the moment attendees enter until they leave. Does it support the objectives of the day and your organisation’s brand?
3. Q and As
General meetings are the stakeholder’s opportunity to hold the board to account. Answering questions should be an important area of focus.
- Roles -Questions should be directed to the Chair, who will either answer them or pass them on to one of the directors. However, it is useful to agree in advance how this will work.
- Request – By understanding the context of the AGM/GM you will be able to anticipate some of the questions. You may also request questions in advance.
- Prepare – Which questions will not be answered in the room? And how will these be dealt with? This could either be for commercial sensitivity reasons, legal reasons or because they are questions of a personal nature.
How Elemental can help
General meetings and AGMs can differ greatly depending on the context of the event or the type of organisation. The above are some practical things to consider on how to run an AGM or general meeting. Elemental has an in-house team of chartered secretaries, governance professionals and lawyers who have helped Chairs and company secretaries of FTSE companies, AIM companies and organisations in the not-for-profit sector, to provide support their general meetings and AGMs. To discuss your individual requirements and how we may be able to help please get in touch with a member of the team. To find out more about our other company secretarial services visit our services page.