Page 9 - The Law of Difficult Meetings

The Law of Difficult Meetings

questions relating to particular shareholdings (perhaps with the assistance of the registrars), provide leaflets
relating to trading companies, or deal with questions, complaints or comments from shareholders about products
or services. As a result, some of the more general discussion of the company’s activities which might have been
raised on the floor of the meeting may be siphoned off and dealt with more constructively and relevantly by the
information booths. Another benefit of the information booth is that the Chairman has another valid reason for
bringing generalised discussion of the company’s business to an end. He can simply refer discussion or questions on,
for example, consumer‑type issues to the information booths.

Information booths can also be used to enable shareholders to register questions which are to be raised at the
meeting. For traded companies (namely companies admitted to trading on a regulated market in an EEA State (in
the UK this includes the LSE main market, the main board of ISDX (previously PLUS) and Turquoise but not AIM)),
such booths can be used as a means of allowing shareholders to pre‑register questions relating to the business
of the meeting, which the company is required to answer under section 319A of the Companies Act 2006 (“CA
2006”). This approach may help to reduce the amount of time that questioning takes at a meeting, as duplicates
can be filtered out and questions can potentially be grouped together according to their subject matter. This
approach may also give some (albeit limited) extra time to prepare answers for difficult questions. Consequently,
ICSA recommends that companies invite shareholders to submit questions in advance of AGMs but notes that this
must not be used as a mechanism to replace spontaneity at meetings.

Additionally, some companies set up sections on their websites prior to a meeting, setting out common questions
with answers.

The company will want to give careful thought to the type of information disclosed at the information booths.
Clearly, the basic considerations are the same as when the Chairman, executive directors or senior executives
answer questions in informal discussions after the meeting: no inside information should be disclosed. Further, if
there is any doubt about whether it is appropriate or in the company’s interests to reply to an enquiry, it would be
sensible to take a note of the enquiry and to give the matter further thought before responding in writing. There
may be a danger in setting up information booths if an AGM falls at a particularly sensitive time, such as around
the time of a takeover bid (Rule 20.1 of the City Code on Takeovers and Mergers states that information should be
made equally available to all shareholders as nearly as possible at the same time and in the same manner).

7. PREPARATIONS FOR CLASS MEETINGS

If various class meetings need to be held, the seating arrangements for those attending will have to be carefully
planned in advance to ensure smooth running. Either the different class meetings can be held in separate rooms,
with the Chairman and directors moving between the rooms, or all the meetings can be held in one room with
seating plans segregating the room into different sections. Either way, it will be essential to set up a strictly
controlled attendance desk.

If all the meetings are held in one room, it is open to a shareholder to argue that he does not want other people
present at this class meeting. Certainly, if an objection of this kind is raised, the matter should be put to the class
meeting. The validity of class meetings relating to a scheme for reduction of capital was considered by the House

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