This article is part of a three-part series on Navigating your Annual General Meetings and provides tips on how to run a successful AGM.
After careful planning, D-day is here and you’re ready to run a successful AGM. The venue is ready, the Chairman and Company Secretary have coordinated their responses and the members are arriving. So, what is the order of the events? How do you handle disruptive members and what’s the voting etiquette? Whether the AGM is for an incorporated association, an unlisted public company or a listed public company, the following tips can guide you on how to run a successful AGM.
Still in the planning phase? Read part one of this series first.
1. Order of the meeting
Ordinarily, it’s ideal to conduct the business of the meeting in a methodical, professional and efficient manner. This will usually involve addressing the resolutions on the agenda first, opening for questions of the members and then allowing for presentations by the Chairman, the CEO or an expert from the business.
Given the importance of addressing resolutions of the meeting to support governance, capital raising and constitutional matters, it’s crucial to not lose sight of the key objectives of your AGM – to obtain approval from members to support the successful running of your organisation. Questions and presentations can be valuable but aren’t the bread and butter of the meeting.
2. Order of the meeting – exception to the rule
The exception to the rule above is where the ‘mob’ is displeased, and the outcome of the resolutions is uncertain. In this case, it’s wise to have the Chair and /or CEO present first to provide background or persuasive commentary for the business items before opening up for questions and then voting on the resolutions. Consider inviting an expert on the matter at hand to address members and provide clarity on the matters before the meeting. With your attendees now having a clearer understanding of the issues and their questions answered, it’s more likely that resolutions will be supported.
3. Addressing disruptive members
This perhaps is the greatest challenge, especially if the disruptive members are a minority. However, it can be overcome. Consider pre-AGM briefing and/or consultation to ensure that everyone is across what’s to be discussed. You can provide information and context and pre-AGM briefing ensures a greater level of transparency. Members who have their issues addressed by those charged with governance before the meeting are less likely to disrupt a meeting as they already feel heard, and in the event they do continue their tirade, they lose their ‘moral high ground’ when it is revealed that before the meeting their concerns were considered and addressed with them.
4. Voting on resolutions
Everyone gets nervous about this, but if you follow protocols in a methodical, fair and confident manner, the likelihood of successfully passing the business of the meeting will increase substantially.
Some more specific issues regarding voting:
Know your reference
Know your Constitution. It’s also imperative to review your Constitution regularly to ensure that it’s still current. Consider legal advice before elections and when updating your Constitution to allow for remote or electronic voting and the emerging technologies in communications.
Voting
To ensure clarity and transparency during meetings, it is recommended to provide members with proxy voting results when they register for attendance. Additionally, displaying PowerPoint slides for each resolution can assist members to be aware of the level of support for resolutions from the proxy votes already received. It is also ideal for the Chair to conduct voting through a show of hands among eligible shareholders where a quorum exists. This approach demonstrates respect for those who attended the meeting in person, regardless of the number of proxy votes. In case of contentious motions, the Chair may announce that all resolutions will be voted upon by those present, and their votes, along with proxies, will be counted and announced immediately after the meeting.
Quorum
For meeting resolutions to be valid, a certain number of members must be present, known as a quorum. The specific legal requirements for the quorum of your organization should be understood. For a listed public company, only two or three members may be required, whereas for bodies like Owners Corporations, the quorum may be 75% of all owners as required by relevant legislation. If a quorum is not present, the Constitution or legislation may allow the meeting to continue, but any motions passed will only take effect after a specified period of time and subject to no objections from members.
Ordinary vs Special Resolution
Normally, resolutions at AGM’s are ordinary resolutions requiring more than 50% of the votes in favour for a resolution to be passed. However, where more mission critical resolutions are to be debated, often the constitution or relevant legislation will require a 75% or more vote in favour. In the Notice of Meeting sent to members, each resolution should be clearly identified as ordinary or special and where there are any voter exclusions (for example, due to conflict of interest) these should be declared and explained.
Explanatory notes to the meeting resolutions
The Explanatory Notes serve the purpose of respecting members and providing clear reasons for resolutions. It’s crucial to take appropriate care and diligence when creating these Notes to avoid confusion and increase the chances of successful resolutions.
Goodwill Marketing & Public Relations
AGM’s are the one time of the year when the members get the chance to openly communicate and liaise within Directors and management. Consider this as a billboard opportunity to show your organisation at its best. Some companies will provide members with ‘showbags’ of their products or will produce a guest multimedia presentation of the year in review, opportunities and future plans. Don’t waste this opportunity.
Finally, when the AGM is over, by all means thank everyone who assisted to make it successful and don’t forget that planning for the next AGM begins immediately after the current AGM.
Please read our other articles in the series:
Article 1: Planning a successful AGM
Article 3: Virtual AGMs are very real
