When it comes to preparing for an AGM, it can seem like a daunting task. There are numerous checks and balances required to ensure that the meeting runs successfully, in addition to complying with all legal timeframes and good governance protocols.
The Chairperson (Chair) relies heavily on the company secretary to properly prepare them for the AGM. Leading the AGM from start to finish, Failure to prepare the Chair could be catastrophic for the company and could lead to disgruntled shareholders, or reputational damage. At worst, it could result in a failed meeting, which would mean needing to begin the process afresh, delaying action on key resolutions that could move the business forward.
So, what should be done prior to the meeting to eliminate these risks?
It may sound trivial, but the starting point is to ensure that the meeting is in the Chair’s calendar. With busy schedules, and fast paced deliverables, it is prudent that the meeting invite is accepted by the Chair.
The next step for the company secretary is to ensure that a rehearsal is scheduled a few days prior to the AGM. This is important for a number of reasons; the rehearsal is the perfect time to iron out all technical difficulties, run through the Chair’s script and make sure that the Chair is familiar with the procedure from beginning to end.
Various responsibilities can be assigned at the rehearsal, including who will be responsible for taking questions and directing them to the Chair. Shareholder engagement at the AGM is paramount, and the Chair needs to be comfortable with the process relating to the Q&A session. If the meeting is being streamed virtually, the rehearsal is the perfect time to test the Chair’s camera and audio and to make sure that they are comfortable on the platform.
Ensure that scripting is finessed
The Chair’s script is the dialogue between the company and its shareholders and needs to be prepared accurately. The script guides the flow of the day, ensures key points are covered and ensures that all compliance processes are adhered to.
A comprehensive script should include the following elements; the welcome, this sets the scene of the meeting and introduces executives present, the Chair should refer to the fact that adequate notice of the meeting has been given and advise whether a quorum is present and that the meeting is duly constituted. An explanation of how voting is to take place should be included in the script.
The script then typically leads into the business of the meeting, meaning that all resolutions proposed are put to shareholders, and shareholders are then asked to cast their vote on each resolution. Particularly important to include is the way the Chair is to take questions, be it after each resolution or at the end of all resolutions having been tabled, but before voting has closed.
The script should include the Chair reading out the results of the voting, indicating to shareholders which resolutions have passed and/or failed, and the steps that the company will take should any resolution fail.
Lastly, the script should guide the Chair to call for any other matter that a shareholder would like to raise, and to then duly declare the meeting closed. Without a properly prepared script, there is trite risk that the Chair may miss something vital, and this can lead to unintended consequences.
Prioritize professional conduct
When chairing a meeting, the way the Chair conducts themselves should echo the professionalism of the AGM. The Chair should seek to strike a balance between ensuring that shareholders engage sufficiently, but also that the business aims of the meeting are achieved. There may be disruptive shareholders present requiring the Chair to respectfully address them and move on to the next topic for discussion.
Though the Chair leads the meeting, they should not dominate the proceedings in a way that hampers inclusivity. The adherence to good governance should always be top of mind for the Chair, with effective engagement being promoted.
The AGM is undoubtedly the most important meeting held by a company each year. It lays the foundation for shareholders to interact with top management. A successful AGM is highly dependent on an effective Chair leading the discussion, who is well prepared and objective. A lack of preparation leaves the Chair open to unnecessary criticism and may lead to a disruptive, ineffective meeting and possible reputational damage for the company.
Lumi is the leading digital platform facilitating in-room, hybrid and virtual AGMs for the world’s largest corporations and membership organizations. It is the only platform that digitizes the entire lifecycle of an AGM in a single solution that enables sophisticated meeting facilitation before, during and after the live meeting.