EGMs on 14 Days Notice – Dissent at Capital & Regional

With the United Kingdom due to implement the EU Shareholder Rights Directive by 3 August 2009, many companies have included on their AGM agendas a resolution to allow them to continue to hold EGMs on 14 days notice, as currently permitted.

The Companies Act 2006 enables listed companies to call a general meeting (other than an AGM) on 14 clear days’ notice. Article 5.1 of the Shareholder Rights Directive, however, requires listed companies to call such general meetings on at least 21 clear days’ notice.

There is an option for EU Member States to permit listed companies to call meetings on shorter notice (minimum 14 days).

The UK will take advantage of this option by allowing companies to retain the current 14 days notice where:

  • shareholders have approved the holding of general meetings on 14 clear days’ notice by passing an appropriate resolution at an AGM; and
  • that the company offers “the facility for shareholders to vote by electronic means accessible to all shareholders.

The Shareholder Rights Directive requires the passing of a resolution of the type at 4(a) above by a two-thirds majority, although BERR are consulting on whether the majority should be set at 75%, in order to be aligned with special resolutions in the UK.

A number of companies have already proposed resolutions which follow the requirements noted above. The EGM of Capital & Regional saw a high level of dissent on this resolution. Although the resolution was passed on a show of hands, some 24.29% of the proxies lodged were cast against the resolution. Further details of the voting and other recent contentious votes are available on Manifest VoteWatch.

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