The Annual General Meeting (AGM) serves a vital governance function for any company. It represents a critical opportunity for the board to engage with shareholders, provide an update on the company's performance and strategic direction, address important business matters, and fulfil legal and compliance requirements.
With many important outcomes riding on the AGM, careful planning and preparation is crucial to ensure the meeting is productive, orderly, and efficient. A well-structured agenda acts as an invaluable roadmap to keep the meeting on track. It guides the chairperson through the necessary proceedings in a logical sequence and helps avoid digressing into irrelevant discussions.
When compiling the AGM agenda, the company secretary should aim to:
- Cover all mandatory items required by law and the constitution
- Prioritise more important matters early in the proceedings
- Allow adequate time for discussion of each item
- Keep the meeting focused by limiting the overall number of agenda items
- Provide opportunities for shareholder participation through questions
Mandatory Items for an AGM Agenda
The company secretary must understand the legal and constitutional requirements for an AGM. Under the Corporations Act 2001, public companies must hold an AGM at least once per year within 5 months of the end of the financial year. Additionally, an AGM must be held within 18 months of the company's registration and then yearly thereafter, with no more than 15 months between AGMs.
The agenda must include:
- Receiving and considering the annual financial report, directors' report and auditor's report
- Electing directors to the board
- Appointing and authorising the remuneration of auditors
- Approving the remuneration report (for listed companies)
In addition, the constitution may stipulate other business to be transacted at the AGM. The company secretary should review the constitution closely when planning the agenda.
Private companies – which are not required to hold an AGM unless their constitution stipulates it – have much more flexibility, but may also choose to follow the common AGM format as a matter of good governance. Either way, the AGM presents an opportunity for shareholders to hear from the board and participate in company oversight.
Drafting the Agenda
When compiling the agenda, begin by listing all of the compulsory items, then add in any special business or shareholder proposals. It is common to group items under these broad headings:
- Preliminaries
- Reports
- Election of directors
- Appointment and remuneration of auditors
- Remuneration report
- Items of general business
- Closure
The preliminaries may deal with administrative matters like confirming the notice of meeting and apologies. Reports would include the financial statements, directors’ report and auditor’s report.
When determining an appropriate order and structure, prioritise significant matters near the start of the agenda before participants become fatigued. For example, voting on director elections and the remuneration report are important decisions, so place them relatively early. Leave any general business items until later.
Allotting Timeslots and Planning Breaks
The company secretary must give careful thought to appropriate timing when settling the agenda. Consider the following:
- What is a realistic time allocation for each item that allows adequate discussion without dragging on? Important matters may require 15-30 minutes, while routine resolutions could be listed for 5-10 minutes.
- Schedule breaks every 1.5-2 hours to maintain participants' engagement and attention.
- Allow flexibility in the agenda by including 10-15 minutes of contingency time between items to account for possible overruns.
- List starting times and finish times for segments. This helps the chairperson keep the meeting on schedule.
- Allow sufficient time at the end for general shareholder questions and comments.
It is also important for the agenda to accommodate unforeseen discussions or extended debates on certain agenda items.
Circulation of Meeting Materials
Under the Corporations Act, public companies must send the AGM agenda with explanatory materials to shareholders at least 21 days before the meeting. This gives shareholders time to review the information and formulate questions.
The circular should include:
- The notice of AGM including date, time, place, and proposed agenda
- The financial report, directors’ report and auditor's report
- Director biographies if candidates are standing for election
- Remuneration report
- Explanatory notes on all agenda items and proposed resolutions
- Proxy voting form
Providing ample information helps shareholders participate in an informed way.
Roles and Responsibilities
The chairperson typically declares the meeting open at the scheduled start time and presides over the AGM according to the agenda. Their role is to:
- Keep the discussions focused and within allocated timeframes
- Facilitate constructive dialogue and orderly participation
- Rule on any procedural matters that arise
- Put forward resolutions to be voted on by shareholders
- Declare the results of any polls taken
- Summarise decisions made and close the meeting on time
The company secretary supports the smooth running of the AGM by:
- Preparing the agenda and meeting materials
- Recording minutes during the meeting
- Providing guidance to the chairperson on procedural issues as required
- Tabulating proxy votes and polls
- Answering any shareholder questions relating to rules or the constitution
An organised, focused AGM supported by a well-constructed agenda demonstrates the board's commitment to good governance. Taking the time to plan the agenda in advance is an important part of running an efficient and productive Annual General Meeting.
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