Page 35 - The Law of Difficult Meetings

The Law of Difficult Meetings

to vote on the same holding and, whilst this is permitted, goes on to urge shareholders to use the same medium for
appointments and instructions during a voting period (using electronic voting channels wherever possible).

25.3 Multiple proxies

It is worth noting that the rights of a shareholder under section 324 CA 2006 to appoint multiple proxies could
be exercised by such shareholder to effectively “flood” a meeting with a large number of proxies who, on a vote
on a show of hands, could prove decisive as to whether a given resolution is passed. However, as mentioned at
sub‑paragraph 24.1 (“General legal considerations”), it is the duty of the Chairman to call for a poll if he knows that
the proxies that he holds show a majority conflicting with the result of a show of hands, so as to give effect to the
real sense of the meeting. Therefore, for example, if a single shareholder appointed a significant number of proxies
in the hope of blocking a resolution to be passed on a show of hands, yet the proxy votes held by the Chairman
suggested that the vote could be passed, the Chairman would be under a duty to call a poll. In practice, the risk
of such disruption is circumvented by the move to electronic poll voting, as discussed in sub‑paragraph 23.3
(“Electronic polling”).

26. CORPORATE REPRESENTATIVES

In addition to the use of proxies, corporate/institutional shareholders may also be represented at general meetings
through the appointment of corporate representatives. Section 323 CA 2006 provides that, where a corporation
is a member of a company, the corporation may by resolution of its directors or other governing bodies, authorise
person(s) to act as its corporate representative(s) at any meeting of the company.

Under section 323(2) CA 2006, a person authorised by a corporation is entitled to exercise the same powers on its
behalf as the corporate shareholder could exercise if it were an individual member of the company, including the
right to speak and to vote.

Where a member appoints multiple corporate representatives in respect of different shares they can exercise their
powers and voting rights in different ways. This means that multiple corporate representatives can be appointed by
corporate nominees to exercise the voting wishes of different nominees. However, if votes in respect of the same
shares are cast in different ways on a poll, they are treated as not exercised (section 323(4) CA 06). It is unclear
whether if the same corporate representative is appointed by several members, he has only one vote on a show of
hands or as many as the number of members appointing him. The Chairman has a duty to call a poll in the case of
an anomalous result based on conflicting proxy votes that he holds.

ICSA recommends that corporate representatives should pre‑register with the relevant company or registrar and
should arrive in good time for the meeting. Corporate representatives should take a certified copy of the authority
which has granted them the right to vote on behalf of the company (i.e. the relevant signed board minutes) to the
meeting, as companies’ articles often require representatives to produce evidence of authority on admission.

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