Hierarchy of company meetings
THERE are different types of meetings held by or in a company from time to time. These meetings are explained below.
Shareholders meetings
Shareholders or owners of a company meet through either Annual General Meetings (“AGMs”) or Extraordinary General Meetings (“EGMs”). During these meetings shareholders make decisions that affect the company. Usually the board of directors accounts to and makes proposals and the shareholders approve or reject the proposals.
Section 167 of the Company and Business Entities Act (Chapter 24:31), (“the COBE Act”) or “the Act” provides for AGMs which should be held once in every 12 months. According to section 167(5) of the Act the following business is to be transacted at a company’s AGM:
Electing board members who are elected at that time,
Setting or approving compensation (emoluments, salaries) to directors,
Reviewing the report on the board’s role and responsibilities,
Considering audited financial statements and the auditors’ report, Appointment of external auditors, Reviewing the board’s recommendations and actions authorising any distributions or relating to issuance of bonds or other borrowings by the company.
Section 168 of the COBE Act provides for the convening of an EGM. This meeting usually deals with urgent issues requiring shareholder decision making and are usually urgent such that they cannot wait for an AGM.
Directors meetings main board
These are common in that directors of a company meet as a board to make decisions collegially. Usually management accounts to and makes proposals to the board seeking approvals from the board.
The directors are appointed by the shareholders. The board is expected to play an oversight role over the company especially over policies, strategies, governance, and other issues. The majority of directors are usually non — executive (not employees of the company) and the minority are executive directors (employees of the company such as chief executive officer, managing director, chief operating officer, finance director, operations director). Board meetings are held at least once every quarter (3 months).
Board committees
Depending on size and other considerations the board of directors may have sub committees of the board made up of directors and chaired by a non- executive director. These sub-committees have specific terms of reference and the board normally delegates issues and requires the sub-committee to look at certain issues in detail and then make recommendations to the main board.
Such committees may include audit committee, finance committee, risk committee, technical committee, operations committee, assets and liabilities committee, human resource committee, etc. They take various forms.
Management meetings
These take different forms depending on the size and structure of the company. A company can hold senior or executive management meetings made up of senior management or executives of the company and the meetings are usually chaired by the head of the company i.e. chief executive, managing director or general manager. These meetings can be held every week, fortnight or month and deal with high level issues such as operationalising board decisions, coming up with policy and strategy proposals to the board.
Below the executive management meeting can be a management meeting attended by all managerial employees and chaired by the head of the company. These can be held every month for example.
Departmental meetings
Departmental meetings involve the head of a department or function such as operations, production, marketing, business development, finance, human resources, etc., meeting his or her departmental team which may involve managerial employees only or also include non-managerial employees.
Works council meetings
These meetings are held by representatives of non–managerial employees or staff (workers’ committee) and representatives of management, usually in equal numbers and chaired by senior managerial employees. Members of the workers’ committee who attend such meetings may include the chairperson, vice chairperson, secretary or some committee members. On the managerial side it is common for example for the head of human resources, finance and operations to attend.
The purpose of the meeting is to deal with common issues such as staff welfare, making the workplace better, improving company performance, etc. Depending on how the meetings are held or used they can be constructive or corrosive.
Workers’ committee meetings
The workers’ committee represents the interests of the employees. The office bearers are elected by the employees from time to time depending on the committee’s constitution.
The representatives champion staff issues and engage management to resolve issues. The representatives also take important messages from management and convey to staff. It is also common to find the workers’ committee playing a role in staff disciplinary proceedings.
This simplified article is for general information purposes only and does not constitute the writer’s professional advice.
◆ Godknows Hofisi, LLB(UNISA), B Acc (UZ), CA(Z), MBA(EBS,UK) is a legal practitioner / conveyancer with a local law firm, chartered accountant, registered tax accountant, insolvency practitioner, consultant in deal structuring and tax and is an experienced director including as chairperson. He writes in his personal capacity and can be contacted on +263 772 246 900 or gohofisi@gmail.com