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Court clarifies directors’ and shareholders’ powers regarding conduct of AGMs
The Grand Court of the Cayman Islands has interpreted a company’s articles to decide whether the directors of a company had the power to postpone an annual general meeting (AGM) after it had been called, and whether the company’s shareholders had the power to chair and hold the meeting.
Although a decision in Cayman Islands law, the judgment draws from other common law jurisdictions, including heavily from England and Wales, and so will be persuasive in future judgments in England and Wales.
What happened?
MILFAM LLC v Morrow and ors [2026] CIGC (FSD) 54 concerned a Cayman Islands company whose shares were listed on the New York Stock Exchange (NYSE).
In brief, the company’s directors gave notice of an AGM to re-elect the company’s incumbent directors. In response, MILFAM, a substantial shareholder in the company, gave notice under the company’s articles that it was putting forward candidates for election at the AGM.
A dispute arose between the company and MILFAM over the validity of that notice, which resulted in legal proceedings. A few days before the scheduled AGM date, the company’s directors announced that they were postponing the AGM for a short period to allow the proceedings to take place.
MILFAM disputed the directors’ ability to postpone the AGM. Representatives of MILFAM attended the intended location of the AGM on the original scheduled date. Finding the meeting room locked, a MILFAM representative, who also held proxy votes from other shareholders, purported to convene the AGM, nominate himself as chair of the meeting, vote against the re-election of the incumbent directors and vote in favour of the election of MILFAM’s candidates.
The directors disputed the validity of this purported AGM and, in particular, MILFAM’s power to elect a chair of the meeting. They argued that the articles gave only the directors the power to elect a chair of the AGM, and that, without a chair, a valid AGM could not take place.
What did the court say?
The court found that the directors had no power to postpone the AGM.
There was no provision in the company’s articles expressly giving the directors power to postpone general meetings once called. Indeed, they contained no provisions for postponement of any kind.
The directors pointed to a reference to “postponement” of the AGM in the article dealing with timing for sending nomination notices. They said this showed that the company’s incorporators had intended for it to be possible to postpone AGMs, and that logically that power lies with the directors.
The judge disagreed, finding that the article in question was a purely administrative provision that dealt with time periods for sending notices. It could not reasonably be read as bestowing on the directors a specific power to postpone AGMs, as this would have required clear language.
The article was simply contemplating circumstances in which an AGM might be delayed, and a reference to postponement was simply one way this might happen. (Indeed, it was not impossible that the article was referring to postponement by the shareholders, rather than the directors.)
As a result, the AGM should have gone ahead.
However, the court also found that the shareholders had no power to elect a chair of the AGM. The company’s articles expressly stated that the chair was to be elected by the directors. There was nothing in the articles giving the shareholders that power.
MILFAM had argued that it must be an implied term of the articles that the shareholders could elect the chair of the AGM if the directors failed to do so (in this case, because they believed they had postponed the AGM and so had not turned up). It said that, without such a term, the company’s corporate governance would be unworkable, as directors could frustrate the will of shareholders by simply declining to attend an AGM.
The court disagreed. The judge noted that directors of a company are under duties to act in the company’s best interests and to exercise the powers delegated to them for a proper purpose. Failing to elect a chair of an AGM would be a breach of those duties.
The means for a shareholder to enforce the election of an AGM chair was thus to bring proceedings against the directors by way of a derivative claim, or against the company itself for breach of its articles. Although a right for shareholders to elect the chair themselves might provide a more immediate remedy, it was not necessary to make the company’s constitutional framework viable.
The judge’s decision was underscored by the fact that the company’s articles had deliberately disapplied model articles that allowed shareholders to elect the chair of general meetings and had not replaced that right with an equivalent express provision. The court concluded that this must have been deliberate, with the intention that only the directors could elect an AGM chair.
What does this mean for me?
This is a decision of Cayman Islands law, and it does revolve around a specific set of facts.
However, the decision will be influential for UK companies, and it raises some key points to note for companies that hold AGMs or other general meetings (particularly publicly traded companies).
Perhaps key among these is that it is imperative to check a company’s articles of association to understand what powers and restrictions exist in relation to holding a general meeting.
Directors of companies that are calling a general meeting should carefully examine the company’s articles to understand the procedure for giving notice of the meeting, electing a chair and conducting business, as well as provisions for adjournment and any provisions for postponement before the meeting begins.
Once a meeting has been called, directors should commit to attending unless there is a particularly good reason not to. AGMs naturally carry a risk of vocal shareholders seeking to place items on the agenda or to agitate against resolutions recommended by the directors. Directors should take professional legal, commercial and strategic advice on how best to deal with these matters.
Substantial or activist shareholders should also take time to understand a company’s constitutional framework. In particular, shareholders should assume, as a starting point, that, unless a company’s articles give them power to conduct a meeting themselves, they will have no right or power to do so.
The statutory framework in the UK differs somewhat from that in the Cayman Islands, as members of a UK company have a statutory right to requisition a general meeting and to convene and hold that meeting if the company fails to do so, as well as a statutory right to petition the court to convene a general meeting if, for some reason, they cannot do so themselves.
But this framework does not allow shareholders to take control of a general meeting, such as the AGM, that has already been called by the company. Although shareholders can put items on the agenda for an AGM, they cannot elect a chair and hold the meeting in the directors’ absence unless this is specifically permitted by the company’s articles.
LSE publishes dividend procedure timetable for 2027
The London Stock Exchange has published its dividend procedure timetable for 2027.
The timetable sets out a series of ex-dividend dates with their corresponding record dates and the dates on which a listed company or AIM company is to announce the dividend. It also sets out certain content requirements for the company's dividend announcements.
Companies that adhere to the timetable do not need to notify the Exchange of their programme in advance. However, dividends that fall outside the parameters set out in the timetable must be discussed and agreed in advance with the Exchange.
The Exchange notes that the UK moves to a T+1 settlement cycle from 11 October 2027, from which date associated ex-dividend dates and the record date will fall on the same business day. The Exchange does not intend to mark securities as ex-dividend from 4 to 18 October 2027 to allow for market transition, with the first ex-dividend date on a T+1 basis being 22 October 2027.
Access the London Stock Exchange's dividend procedure timetable for 2027 (opens PDF)
Other items
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The Financial Conduct Authority (FCA) has published details of changes to its standard turnaround times for reviewing documents and guidance cases, as well as the process for listing applications, during the Christmas and New Year holiday period.
Access the FCA’s listing and official list turnaround times during Christmas and New Year 2026
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The Home Office has introduced mandatory multi-factor authentication (MFA) for all users of the Sponsorship Management System (SMS) – the platform through which sponsors manage their licence and day-to-day sponsorship duties in respect of their visa holder employees. The Home Office has also announced two further changes: the deactivation of inactive SMS user accounts, and the removal of the "Level 2" user role.
Read our colleagues’ article on changes to visa sponsor requirements and steps to take
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