A good corporate governance is where shareholders of companies in having equal responsibilities and advancing own interest by practicing the rights given by Companies Act,2016 in ensuring that the companies they invested are well governed. An AGM is to build comfort, confidence, company’s direction, control with assurance and building up shares’ value but if the BOD failed to perform, then it could be bad to the company. Before moving on, let’s look at a Sample of AGM agenda Website Standard AGM Agenda 28122020 for better preparation of meeting.
Before the company in preparing AGM, you as the shareholder may go through the checklist in preparing for AGM:
Pre-AGM : Shareholder Pre AGM Checklist 21032020
1. During AGM:
a. The attendance of BODs and any absenteeism, look forward to Chairman’s explanation;
b. Voting procedures;
c. Questions and Answers (Q & A)’s slot;
d. The attendance of Auditor if any outstanding issues;
e. Appointment or resignation of Auditor if any;
f. Highlight of any legal cases and it’s implication.
2. Post AGM:
a. A soft copy of meeting minutes and it’s action plan in not more than 7 days;
b. The accuracy of the meeting minutes before confirmation;
c. Communication channels for future interaction with BODs.
3. The ORDINARY business usually considered and transacted at an AGM includes the following:
a) Laying of the company’s audited profit and loss account for the period since the preceding account made up to a date not more than six months before the date of the AGM together with an audited balance sheet, statement of financial position, statement of profit or loss and other comprehensive income, consolidated statement of changes in equity, cash flow statement and notes to the accounts (“financial statements”) and a directors’ report and such other statements comprised in the company’s annual report including, among others, statement of financial position, statement of profit or loss and other comprehensive income, consolidated statement of changes in equity, cash flow statement and notes to the accounts (AGM Corporate Governance Checklist 2020.pdf);
b) appointment of new directors;
c) election of directors in the place of those retiring or re-election of retiring directors;
d) declaration of dividends;
e) remuneration of directors; and
f) appointment or re-appointment and fixing of the remuneration of the auditors.
4. The SPECIAL business for AGM will be:
a) approval to continue in office as independent directors;
b) authority for Board of directors to issue and allot shares in the company provided such issuance and allotment does not exceed 10% of the issued and paid-up capital of the company;
c) authority for the company to purchase its own shares; and
d) shareholders’ mandate for recurrent related party transactions.
5 . Hereby, these are the following given rights of a shareholder (Section 293) in AGM or EGM and inside the Company:
a. To attend, speak, vote & nominating (one-share-one-vote) at general meetings ( Section 340);
b. To requisition the company in convening a general meeting (Section 310) if shares are more than 10%;
c. To place matters on the general meeting’s agenda (Section 87);
d. To appoint up to 2 proxies in relation to a meeting (Section 334);
e. For corporate shareholder, a corporate representative can be appoint to attend the general meeting while for individual shareholder can appoint proxies where the proxies are having the rights to attend, participate, speak and vote at the meeting of members of the company (Section 334);
f. Shareholder is encourage to participate in the AGM/ EGM with the platform stated in the agenda;
g. Sell or subscribing new shares in the company;
h. To receive dividends upon declared by the Board of Directors;
i. To read and assess to the Company’s Audited Financial Report timely;
j. Taking legal action to the Company upon violation of fiduciary duty ;
k. To assess the remaining assets after company’s strike up or liquidation.
6. 15 most common questions during the AGM which are prepare by the shareholders towards the directors:
a. What are the current financial position and could the company in making on-time payment to all liabilities?
b. Are the figures being audited and how robust it is?
c. Is the current exchange rate effected the Company’s revenue and if yes, how to risk-manage it?
d. What is the BOD’s plan for future need of working capital and do we need to raise another round of working capital?
e. Has the BOD able to identify the under-performing assets, human capital and operations division? If yes, what are the BOD’s decision about it: Keep, Sell or any significant importance?
f. Are the inventory levels healthy and what are the industry’s averages?
g. How the company manages credits, debt chasing and process sending early warning alarms?
h. What are the credit limits given by the banks for now?
i. How the company does the valuations of current assets?
j. Is there any changes comparing to the current year vs last year’s investment plan?
k. How would the BOD rates their relationship with bankers, social media and public?
l. Any breached contracts so far and if yes, how to prevent from happening again?
m. Issues arising in debt management and actions being taken.
n. Is the supply chain supportive and any weakness found?
o. The cost of retaining talents/ key-man, redundancies in manpower and acceptable labor costing?