Essence of the Annual General Meeting
CHAPTER 2 of the ZimCode addresses ow ner sh i p a nd control of the company and section 14-34 specifically highlights an important aspect for the company which is the Annual General Meeting (AGM) or Extra- ordinary meeting of shareholders.
The AGM is t he ultimate authority for any company where shareholders exercise their rights in terms of the statutes of the company and the law especially the provisions of Companies Act [Chapter 24:03]
The AGM is a formal platform for shareholders, board and senior management, company stakeholders and the general public to get a broad overview of the organisation’s current directions, financial health and confirms its purpose.
Most importantly, the company should purpose to make the AGM a positive experience where people go away firmly committed to the company and its goals instead of turning it to a platform to settle scores.
In order for the company to hold successful AGMs there is need for adequate preparations for the meeting. The Secretary with assistance from the rest of the company should take a leading role in preparation for the meeting.
At least a twenty- one days notice should be given to enable all members to attend the meeting.
According to section 28 of ZimCode ‘ The notice must con- tain full details of the registration process and sufficient information to enable shareholders to decide whether they will attend the meeting and how they will participate in the discussions’. Proposed resolutions, names and brief curriculum vitae of members that are standing for election or re- election must be in the notice of the AGM
Ideally the meeting should be held within three months of the end of the financial year.
The company should consider advertising the meeting in newspapers circulating in their area, on social media or electronically so as to encourage stakeholder involvement and an inclusive atmosphere.
The advert should indicate date, place, time and agenda of the meeting.
Important documents such as a summary of the company’s strategic plan, reports of the company’s performance indicators and growth prospects, management practices and policies pursued by the board, reports on analyst briefings including positive and negative media reports should be made available to all shareholders in good time to give them adequate time to prepare for the meeting.
The resolutions from the most recent Annual General Meeting and any subsequent extra- ordinary meetings are circulated to the shareholders at the time of notification of the meeting.
The ZimCode highlights that the quorum of the meeting must be defined in order to ensure reasonable participation by all classes of shareholders. The voting rules must be simple and available to all shareholders. Voting by proxy should be clear and objective. Absentia voting methods via email and fax should be accommodated and encouraged provided the process is well formulated to avoid abuse. Chairpersons of committees of the board should attend the AGM to answer issues which relate to their areas of jurisdiction and to assist the Chairperson of the board to answer questions.
The agenda for the AGM should be clear and simple and must leave no room for ambiguity as indicated in section 34 of the ZimCode.
A clear agenda enables the meeting to tackle the right issues and not waste time on clarity of terms.
The AGM agenda may include approving the minutes of the previous AGM, chairperson’s report, f inancial report, approval of audit report, general business, nomination of office bearers and motions must be moved and resolutions adopted.
The AGM is also an opportunity to revitalise the company through the official engagement of members into key elected positions.
The Board and senior management should make sure that they have approached people who are willing to fill the vacancies and also ensure that they have enough good nominations to fill the available positions.
There is need to check with the company constitution, board charter, memo and articles of association to see if anybody is ineligible to stand for these offices.
Companies can take advantage of the AGM to gain publicity by making announcement that may be of more general interest than just to their members. The AGM enables the various stakeholders to gain confidence in the leadership of the company and the inclusiveness of the meeting can be used to attract partnerships and widen the company’s business networks.
After t he AGM, all parties should be prepared to scope their work in light of the outcomes of the meeting. Hand- overs should be done and all documentation especially t he AGM minutes should be made available to the people.
The AGM remains the ultimate authority of the company; therefore companies should purpose to continuously hold these meetings to ensure that they comply with the law as well as re-assuring their stakeholders that they are providing good leadership to the company.
The AGM also gives shareholders the platform to influence the course of the company which is very key.
A successful AGM requires adequate preparation, creating an inclusive atmosphere, active participation of members and making use of the outcomes of the AGM.
For more information on the ZimCode contact: secretariat@ nationalcodeoncg.co. zw