Do shareholders vote at your
Annual General Meeting by a poll or by a show of hands?
Whichever method you choose, there are a number of practical steps
you must consider. The first port of call is your company's
articles of association, as these will state how voting is to be
decided at a general meeting.
There is a growing trend for listed companies to arrange for the
business at their AGMs to be voted on by a poll. It can be said
that the full power of the shareholders can only be felt when a
poll is called and some listed companies have changed their
articles and abolished voting by a show of hands completely. The
final result of a poll vote is considered to be more democratic as
it reflects the voting preferences of all shareholders who have
lodged a proxy vote and not just those who attend the AGM. However,
this can mean a more lengthy and involved process at the AGM.
Whilst PIRC and other proxy voting agencies consider poll voting
to be the most appropriate way for listed companies to undertake
business at general meetings, the UK Shareholders Association has
found otherwise. It seems that private shareholders wish to retain
voting by a show of hands as it is one of the few ways that private
shareholders attending the AGM can have an impact on the board.
Voting by a show of hands is easier and more straightforward on a
practical level at the AGM, especially if there is a consensus.
Each shareholder present in person or by proxy has one vote,
irrespective of how many shares they hold. The result of the AGM
can be announced straight after AGM. However, if there is
opposition to a proposal or a shareholder demands a poll, the
Chairman must be prepared to call a poll and the Company Secretary
should include this procedure within the Chairman's script.
It is for each individual company to determine the method to be
used, based on the company's circumstances and its shareholder
If companies move to voting on a poll, the Notice of AGM should
set out that voting will be held by poll and explain the reasons
for doing so. This will also need to be reflected in the
Chairman's script. Liaison with your company's registrars
will also be key as they will be responsible for issuing poll
cards, counting them and checking them against proxy forms lodged
and against the register of members and preparing a report and
final certificate of the result of the pol. So it is important that
you highlight this in advance with them so that they can ensure the
appropriate equipment is brought to the AGM to conduct the
Whichever method is used, the results of the AGM must be
announced via an RNS announcement as soon as possible following the
conclusion of the AGM, uploaded to the National Storage Mechanism
and must be displayed on the company's website.
Also remember that if there is a significant proportion of votes
cast against a resolution (considered to be around 20% or more),
the company should explain when announcing the results of voting
what actions it intends to take to understand the reasons behind
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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