Module 3, Chapter 10 - Meetings

Question 1

Approval of resolutions of the members of private companies may be sought by which two processes?

Answer 1

1. The written resolution process
2. Holding a general meeting

Question 2

In order to constitute a valid members’ meeting, a minimum notice period must be given to all members entitled to attend
the meeting. What information should the notice include?

Answer 2

The notice must contain:
1. The name of the company
2. The place, date and time of the meeting
3. Details of the business to be considered
4. Any special resolutions must be identified
5. Details on the members’ rights to appoint proxies.

Question 3

What is a quorum?

Answer 3

The minimum number of members of an assembly or society that must be present at any of its meetings to make the proceedings of that meeting valid. Record of the quorum should be kept.

Question 4

Companies with more than one director usually hold regular meetings to discuss strategic and management issues. What are the meetings usually called?

Answer 4

Board meetings.

Question 5

True or false? The directors collectively have authority to exercise the powers of the company subject to any restrictions in the articles of association.

Answer 5

True!

Question 6

On average, what is the minimum amount of people required to hold a meeting?

Answer 6

Meetings generally require two or more people to be present but they need not be in the same place.

Question 7

What authorities do Directors have in regards to the day-to-day management of a company?

Answer 7

Directors have general authority to exercise all the powers of the company in the day-to-day management of the
company. This may include:

1. Purchase of new machinery
2. Allotting new shares
3. General authority to recruit additional employees

Question 7

Directors have general authority to exercise all the powers of the company in the day-to-day management of the
company. This power may be subject to restrictions. List where these restrictions may be documented.

Answer 7

1. Articles of Association
2. An individual director’s service agreement
3. Board schedules of matters reserved to the board generally and any shareholder or investors’ agreement

Question 8

What are the types of meetings directors may hold?

Answer 8

1. Board meetings
2. Separate management or executive committee meetings

Question 9

What type of meetings do publicly traded companies hold?

Answer 9

Publicly traded companies typically hold standing committees to which certain tasks and oversight are delegated including committees for audit, risk, remuneration, nomination and disclosures.

Question 10

Are members’ meetings restricted?

Answer 10

Yes. Members’ meetings are usually restricted to an annual meeting to receive the report and accounts and to renew various general authorities and will hold ad hoc general meetings only when required.

Question 11

With a few exceptions, the members of a private company may pass any resolution that could be put to a general
meeting by written resolution. What are the exceptions?

Answer 11

The exceptions are:
1. Removal of a director under s. 168
2. Removal of an auditor under s. 510

Question 12

Who may propose written resolutions?

Answer 12

By the directors using the procedure set out in s. 291 or by the members using the procedure set out in ss. 292–295 (s. 288).

Question 13

A copy of the proposed written resolution must be sent to all members entitled to attend and vote at a general meeting. What two methods may be used to send the written resolution?

Answer 13

1. By post
2. By electronic means

Question 14

How does a member signify their agreement to a written resolution?

Answer 14

By returning to the company a document in hard copy or electronically, identifying the resolution and signifying their consent.

Question 15

When is a written resolution approved?

Answer 15

A written resolution is approved when the requisite majority of members have signified their agreement, votes being calculated according to the number of shares held by each member.

Question 16

If agreement has not been given within 28 days from the date the resolution was circulated, what happens?

Answer 16

It is deemed to have lapsed and any consent given after that date has no effect.

Question 17

Who else should receive copies of written resolutions?

Answer 17

Copies of written resolutions circulated to members must also be sent to the company’s auditor if it has one.

Question 18

Directors must convene a general meeting if requested to do so by any member or members holding between what percentage of paid-up share capital or voting rights?

Answer 18

Directors must convene a general meeting if requested to do so by any member or members holding between them at
least 5%, in nominal value, of the paid-up issued share capital of the company or, if the company does not have share
capital, 5% of the voting rights.

Question 19

True or false? Members of a public company may also put forward resolutions to be included in the next annual general meeting notice.

Answer 19

True!

Question 20

What are the requirements for a resolution to be considered within a public company?

Answer 20

For the resolution to be considered it must be proposed by holder[s] holding between them at least 5% of total voting
rights or by not less than 100 members. In addition, the notice proposing the resolution must be received by the company
at least six weeks prior to the date of the meeting or, if earlier, the date of issue of the notice.

Question 21

Meetings of members are called general meetings and, provided appropriate notice has been given and a quorum is
present, may consider any business. The more common types of business put to general meetings are resolutions
relating to what?

Answer 21

1. Share capital either to authorise the directors to issue additional shares, waive rights of pre-emption, approve
   purchases of shares, redemptions and bonus issues.
2. Create a new class of shares or vary existing share rights.
3. Approve matters relating to the directors such as matters in which the directors are conflicted.
4. Appointments or removal of directors.
5. Amendments to the articles of association
6. Changing the registration of the company, such as a conversion from private to public, and finally resolutions relating to its closure or liquidation.

Question 22

List the types of meetings that members can hold.

Answer 22

1. General meetings
2. Annual meetings
3. Class meetings
4. Court meetings

Question 23

Public companies must hold an AGM meeting how many times a year?

Answer 23

Once a year.

Question 24

What are the primary purposes of an AGM?

Answer 24

Their primary purposes is to:
1. Receive the reports of the directors, financial statements, remuneration report (if any).
2. Rotation and re-appointment of directors and re-appointment of auditors.
3. Declaration of final dividend and renewal of any annual authorities relating to the directors’ authority to issue shares and waiver of pre-emption rights.

Question 25

What is a class meeting?

Answer 25

These are like general meetings but only members of the specific class are entitled to attend, even if the class has no
voting rights. Class meetings are normally only required if there is a proposal to amend the articles and, in particular,
rights attaching to shares, and the changes amend the class rights. It is not possible to amend class rights, even
indirectly, without the consent of the affected class.

Question 26

What is a court meeting?

Answer 26

Very occasionally a company might be required to convene court meetings. These are meetings associated with an
application to court (e.g. to approve a reduction of capital or scheme of arrangement).

Question 27

At members’ meetings there are two types of resolution. Name them.

Answer 27

Ordinary and special.

Question 28

What is the main difference between ordinary and special Resolutions?

Answer 28

The main difference is the majority required to pass each type of resolution.

Question 29

What does an ordinary resolution require to be approved?

Answer 29

An ordinary resolution simply requires a majority of those voting to vote in favour of the resolution for it to be approved.

Question 30

What does an special resolution require to be approved?

Answer 30

A special resolution requires 75% of those voting to vote in favour of it.

Question 31

A special resolution is only required where this is a specific requirement of the Act or, rarely, the articles may require a
special resolution for certain resolutions. Provide two examples.

Answer 31

Examples where a special resolution is required include changes of company name and amending the articles.

Question 32

What is the minimum notice period for a members’ meetings in a private limited company?

Answer 32

14 days

Question 33

What is the minimum notice period for a members’ meetings in a public company?

Answer 33

21 days

Question 34

What is the minimum notice period for a members’ meetings in a public company that is not a traded company?

Answer 34

14 days

Question 35

What is a special notice?

Answer 35

For a few resolutions special notice must be given. Special notice requires that notice is given to the company at least 28
days before the date of the meeting and that notice of the special notice be given to members at the same time as the
notice of the meeting.

Question 36

Define ‘proxy’.

Answer 36

A proxy is a person appointed by a member to attend and vote at a members’ meeting on their behalf.

Question 37

How many proxies may a member appoint?

Answer 37

All members have the right to appoint one or more proxies to attend and vote on their behalf; any provision in a
company’s articles to the contrary is not valid.

Question 38

How does an individual be appointed as a proxy?

Answer 38

The appointment of a proxy is made by lodging a form of proxy with the company, often at its registered office or the
office of its share registrar.

Question 39

How is someone revoked as a proxy?

Answer 39

A form of proxy is automatically revoked if another form of proxy is received or may be revoked at any time by the
member by providing written notice to that effect.

Question 40

Who is entitled to receive notices of and attend members’ meetings?

Answer 40

Members, proxies and corporate representatives, directors and auditors, are entitled to receive notice of and attend
members’ meetings.

Question 41

What is the role of the chair in a shareholders’ meeting?

Answer 41

The role of the chair at a shareholders’ meeting is to ensure that the meeting is properly and fairly conducted, allowing all
opinions to be expressed.

Question 42

Voting at members’ meetings is undertaken in one of two ways. List the two ways.

Answer 42

Either on a show of hands or via a poll. In both cases, for a vote to count, it must be cast either for or against the resolution.

Question 43

What are the advantages of voting using a show of hands?

Answer 43

Much quicker than a voting via poll.

Question 44

What are the disadvantages of voting using a show of hands?

Answer 44

A major disadvantage of voting on a show of hands is that no account is taken of any forms of proxy received. As the
chairman is likely to know the proxy count they should demand a poll vote if the vote is close or if the inclusion of the
proxy votes might arrive at a different outcome. However, there is no compulsion on the chairman to do so.

Question 45

What is the process to circulate a written resolution?

Answer 45

1. The directors circulate the full text of the resolution(s), either in hard copy or electronically, to all members entitled to attend and vote at a general meeting.
2. The members consider the resolution(s) and signify their consent to some or all resolutions and return either in hard copy or electronically, a document identifying the relevant resolutions and signifying their consent.
3. A written resolution is approved when the necessary majority, determined according to their shareholding, is reached.
4. If the necessary majority has not been reached within 28 days of the resolution being circulated, it is deemed to have been defeated.

Question 46

What happens if all the members consent to a resolution?

Answer 46

Where all the members consent to a resolution it will be approved under the so-called unanimity rule even if none of the
necessary formalities have been observed.

Question 47

Who can convene a directors’ meeting?

Answer 47

Any director or the company secretary at the request of a director can convene a directors’ meeting.

Question 48

True or false? There is no set format or content for the notice of a directors’ meeting nor are there prescribed notice periods with the legislation simply requiring that reasonable notice be given.

Answer 48

True!

Question 49

What is recommended to be included on a directors’ notice of meeting?

Answer 49

Best practice guidance is that notice of a directors’ meeting should state the name of the company, the date, time and
place of the meeting and an agenda.

Question 50

What is the recommended notice period for a directors’ meeting?

Answer 50

The length of notice will depend entirely on the urgency of the business, the location of the directors and the content of
the board papers accompanying the notice. In all cases, directors should have sufficient time to read the board papers in
advance of the meeting.

For urgent meetings or meetings of directors located in the same building, reasonable notice might be as little as a few
hours.

Question 51

What is the quorum for directors’ meetings?

Answer 51

The model articles provide that the quorum should be two directors.

The articles will set out the quorum for directors’ meetings and will often provide that this can be amended by the
directors themselves.

Question 52

Directors are required to declare any interests which either conflict or might conflict with the interests of the company. What happens if a director has a significant conflict of interest?

Answer 52

Where a director has a significant conflict or a direct interest in a proposed transaction this might require approval
of the members either by written resolution or at a general meeting.

Question 53

Who can attend a directors’ meeting?

Answer 53

Only directors have the right to attend directors’ meetings. Any other person attends with the consent of the meeting.

Question 54

In a directors’ meeting, what is the purpose of the chairman?

Answer 54

The chair should ensure that all points of view are discussed on any issue whilst avoiding repetition. Discussion should
be pertinent to the matter under consideration and should not be allowed to digress into other areas.

Question 55

In a directors’ meeting, how is a chairman selected?

Answer 55

It is for the board members collectively to elect one of their number to act as chair.

Question 56

What qualities should a chairman have?

Answer 56

1. Demonstrate ethical leadership.
2. Provide advice and support to the executive team (especially the chief executive) while not straying into executive decision making.
3. Promote good relationships with all directors and senior managers, encouraging them to use all their skills, qualifications and experience.
4. Create value and ensure accountability.

Question 57

How can one make meetings effective?

Answer 57

1. Ensure that sufficient notice is given, including the issue of board papers to allow directors sufficient time to read the items.
2. High-quality board documentation – ensuring the board papers only contain relevant information and ideally include
   a short executive summary and a clear statement of the action required of the directors.
3. Ensure the board and/or participants have a clear understanding of their role.
4. Allow sufficient time for debate and challenge.
5. Good time management.
6. Reflect on previous decisions.

Question 58

What should minutes of a meeting include?

Answer 58

The minutes should record decisions reached together with a summary of the key points leading to the decision to allow the reader an understanding of the discussion. This should include details of any challenges raised during the discussions and review of any response to those challenges and monitor any actions requested by the directors.

Question 59

Who determines how much of the meetings discussion should be reflected in the minutes and whether this should be in the form of suitable narrative, formal resolutions, action points or follow-up actions?

Answer 59

The chair, in conjunction with the company secretary.

Question 60

What is the role of committees?

Answer 60

They provide more detailed independent oversight of certain areas. While the board makes use of committees to assist in its oversight of their area of interest, it retains responsibility for and makes the final decisions in all those areas.