A meeting is the coming together of persons, and an assembling of several persons for the purpose of discussing and acting upon matters in which they have a common interest. According to Aiyar’s Judicial Dictionary “for a meeting, there must be at least two persons, because a man cannot meet himself.”
The Companies and Allied Matters Act Cap C20, Laws of the Federation of Nigeria, 2004 (CAMA) lists types of meetings. One of these is a general meeting, which may be a statutory meeting, an Annual General Meeting (AGM) or an Extra-Ordinary General Meeting.
A common complaint of shareholders is that the AGM is the only opportunity they have to interact with the directors and management and to air their views on the affairs of the company. It is recommended that the board and management should organise additional avenues to engage shareholders, whilst being mindful of corporate governance considerations on granting preferential treatment to shareholders.
A general meeting is intended as a key instrument for the protection of shareholder rights. The general meeting is an indispensable tool of corporate governance as it creates a platform for shareholders to engage with the board on the performance and actives of the company. Unfortunately, the AGM is treated as a yearly gala to fete shareholders.
The NCCG code recommends best practices towards the conduct of general meetings in addition to the requirements in CAMA. It is recommended that the meeting be conducted in an open manner to foster free discussion on all issues on the agenda. Shareholders – particularly minority shareholders – should be provided ample opportunity and enough time to participate fully and contribute effectively at such meetings. The venue of a general meeting should be accessible to shareholders, to ensure that shareholders are not disenfranchised on account of the choice of venue.
The code recommends that the notice and documents of meeting shall be circulated to shareholders at least 21 days before the date on which the meeting will be held. To ensure that they contribute meaningfully to deliberations at the general meeting, it is important the shareholders receive the Annual Reports well in advance and not on the day of the AGM as is now the trend.
General meetings are important platforms for the board to engage shareholders to facilitate greater understanding of the company’s business, governance and performance. They provide shareholders with an opportunity to exercise their ownership rights and express their views to the board on any areas of interest.
In conducting the meeting, it is recommended that the board ensures that unrelated issues for consideration are not lumped together. All matters to be considered should be clearly and separately set out. Separate resolutions should be proposed and voted on for each substantive issue. The Board should also ensure that decisions reached at general meetings are properly and fully implemented as governance directives. The code also provides that the chairmen of all board committees and of the statutory audit committee be present at general meeting to respond to shareholders’ inquiries.
The failure or success of the general meeting is often dependent on the effectiveness of the board chair. Section 240 of CAMA provides that the chairman, if any, of the board of directors shall preside as chairman at every general meeting of the company, or if there is no such chairman, or if he is not present within one hour after the time appointed for the holding of the meeting or is unwilling to act, the directors present shall elect one of their number to be chairman of the meeting. If at any meeting no director is willing to act as chairman or if no director is present within one hour after the time appointed for holding the meeting, the members present shall choose one of their members to be chairman of the meeting.
The chairman should conduct the meeting with utmost care and attention, peacefully and with dignity. He should conduct the proceedings with regularity as per the agenda and can cast his or her vote provided, he or she is a shareholder. The chairman is responsible for ensuring that its business is conducted in an orderly manner and ensuring that all questions that arise are promptly decided.
In the case of John v. Rees ((1969) 2 W.L.R. 1294), the court held that when facing disorder, the Chairman should make earnest and sustained effort to restore order. If these efforts are in vain, the chairman should attempt to put into effect any provisions for adjournment which appear in the rules. Where the rules fail or are not in existence, he should use his inherent power to adjourn the meeting for a short while, ensuring that all know of the adjournment. However, where the disorder is or results into an actual violence, i.e. blows are being exchanged and there is a real possibility of grievous bodily harm, the chairman should immediately adjourn the meeting.
Institutional investors hold significant stake in most of the companies listed on the Nigerian Stock Exchange. They are in a position to positively influence the efficient governance of their investee companies and given their significant stake, ought to have an incentive to take a more active role in monitoring corporate misconduct.
To a large extent, they have been content to take a passive approach to their investment or simply sell the shares of underperforming companies. There is need for more activism on the part of institutional investors, as the shareholder associations are too fragmented and usually ineffective in influencing corporate behaviour. Shareholder associations on the other hand need to equip themselves to be positioned to monitor and assess the wellbeing companies such that their intervention will be more structured and value adding.
