After careful planning, the day of the AGM is here. The venue is ready, the Chairman and Company Secretary have coordinated their responses and the members are arriving. So, what are the order of the events? How do you handle disruptive members and what’s the voting etiquette? Whether it’s for an incorporated association, an unlisted public company or for a listed public company, the following are the common scenarios of AGM’s that can all be addressed in a similar manner.
Still in the planning phase? Read part one of this series first.
1). Order of the meeting business
Ordinarily, its ideal to conduct the business of the meeting in a methodical, professional and time efficient basis. This involves:
- Doing the business first;
- followed by Question and Answers (Q&A) and/ or;
- ending with presentations.
This will enable people/stakeholders to leave once the official business is done. Q&A and presentations can be very valuable but are also very time-consuming. Don’t lose sight of the objectives of the AGMs – get all the business of the meeting done so that resolutions are passed.
2). Order of the meeting – exception to the rule
The exception to the rule above is where the “mob” is angry, and the outcome of the resolutions is uncertain. In this case, the best plan is to have the Chair and /or CEO do their presentations first, followed by Q&A. Consider also the possibility of an inhouse expert, such as a geologist or technology leader providing a deeper dive into the issues at stake. With these stakeholders now having a much clearer understanding of the issues and an opportunity to vent their opinion and feelings, there should be a greater likelihood of the successfully passing the business of the meeting.
3). Addressing disruptive members
This perhaps is the greatest challenge, especially if they represent only a minority of stakeholders – however, it can be overcome. Consider pre-AGM briefing and/or consultation to allay gears, to provide informative advice and transparency. By doing this you may blunt their attack at the AGM and the chair can take the “moral high ground” by referring to the extent that Directors/Management went to such that these issues could be addressed beforehand.
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.
Ideally, everyone would be disciples of Robert’s Rules of Order Newly Revised (2011 – 11th edition) which really is the bible for meeting procedures, but the reality is apathy all round in knowing how to run public meetings.
Some more specific issues regarding voting:
Know your Reference
Know your Constitution; understand the relevant legislation such as (i.e. Corporations Act 2001 – Part 2G and Division 8 in particular = s248 to s253). Consider that the Constitution may be out-of-date and you should consider legal advice before elections, communications, voting etc and potentially replacing an old Constitution with new for the 21st Century which allows for electronic voting and communications.
Have proxy voting results available for members as a handout when members register for the meeting attendance and/or have PowerPoint presentation slides come up with each resolution, so members are in no doubt as to whether resolutions are won or not. Ideally the Chair will conduct voting on a show of “hands” being eligible shareholders where a quorum exists. This method shows respect to the members who actually bothered to attend, even if the proxy numbers are clearly sufficient to win every motion. Where motions are likely to be contentious, the Chair can best handle this announcing that all resolutions will be voted upon by those in attendance and those votes along with proxies will be counted and an announcement made of the results immediately after the meeting.
Validity of the meeting resolutions is dependent upon a quorum being present. You need to know the legal requirements for the quorum of your organisation. A listed public company will normally require only two or three members to be present but for bodies like Owners Corporations, the quorum can be 75 per cent of all owners (in accordance with relevant legislation). If a quorum doesn’t exist then the Constitution or legislation may enable the meeting to proceed and that motions passed do not take effect until a specified period of time after the meeting and subject to there being no objection from members.
Ordinary vs Special Resolution
Normally, resolutions at AGM’s are ordinary resolutions requiring more than 50 per cent 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 per cent 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
Treating members with due respect and clearly outlining the reasons for resolutions is the purpose behind the Explanatory Notes. It is highly recommended to avoid confusion of members and increase the likelihood of resolutions being successful that appropriate care and diligence is expended on these Notes.
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!