Page 11 - The Law of Difficult Meetings

The Law of Difficult Meetings

Section Heading:
Flow text to this box for the Header (H) Part 3 – Commencement and conduct of meeting

8. ORDER OF BUSINESS

The order in which business is transacted at a potentially difficult meeting may be critical to its conduct. If it is,
then careful thought should be given to the matter when preparing the notice of meeting.

8.1 Report and accounts

Some companies expect noisy disruption when questions are taken on its activities following the Chairman’s
statement and the proposal of the resolution to adopt the report and accounts. If the report and accounts are likely
to generate hostile discussion, and they are considered at the beginning of the meeting, the atmosphere generated
may remain for the rest of the meeting even though the business is relatively non‑contentious. It would be unusual,
but not impossible, to reverse the usual order of the meeting and take the adoption of the accounts and the
declaration of a dividend as a last item. However, if a meeting is well run by the Chairman and the shareholders
are given a fair opportunity to have their say on particular issues at the beginning of the meeting, the mood of
the meeting may well settle down once the formal business of the meeting begins. This strategy is again aimed at
limiting disruption to the meeting and is commonly adopted.

Another possible solution to this problem is for the Chairman to make it clear that discussion on the adoption of
the accounts is to be restricted to matters directly relevant to the resolution under consideration. However, the
Chairman might then explain that questions on the general business activities of the company will be allowed
at the end of the meeting. This may permit the strictly formal business to be transacted with the minimum
disruption and keep the heated debate and discussion on controversial issues until the end of the meeting after
the transaction of the formal business. (See further paragraph 12 (“Debate and discussion”) below.) It should also
be noted that there is no statutory requirement that the accounts be approved. The statutory obligation for public
companies is simply to lay them before the meeting (section 437 CA 2006). However, it is a requirement of the
Corporate Governance Code (Code provision E.2.1) that a resolution should be put to the AGM relating to the
report and accounts. Shareholders often choose to vote against a resolution to receive or approve the report and
accounts as an act of disapproval of the company’s performance or policy.

8.2 Taking of a poll

Except in relation to the election of the Chairman of the meeting or a question of adjournment, when a poll must
be taken immediately, it is common for articles to provide that a poll may be taken either immediately or at such
time (within, for example, 30 days of the demand) or place as the Chairman directs and that the demand for a
poll does not prevent a general meeting from continuing, except as regards the question on which the poll was

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