Press Release
ICSA issues new guidance note on corporate representation and proxies at general meetings
22 January 2008: The Institute of Chartered Secretaries and Administrators (ICSA) has today published a guidance note which addresses the issue of how investors can best take part in company general meetings. The new law, to be brought in under the Companies Act 2006 on 1 October 2007, is unclear on this point.
Investor groups, companies and other interested parties are pressing for the law to be amended and clarified. However this cannot be achieved quickly. The main recommendation in the Companies Act is that investors wishing to take part (and in particular to vote) at shareholder meetings should appoint multiple proxies. However, there may be times when this does not work, for example if the proxy deadline is missed. In such cases the note suggests that one person (usually the Chairman of the meeting) acts as the designated corporate representative (or DCR) for all of those acting as corporate representatives of the same shareholder. The DCR casts all the votes on behalf of all of the corporate representatives for that member. The other representatives use voting directions cards to instruct the DCR how to vote (or to abstain). Many of the top City law firms and the registrars have agreed that this is the best short term solution to facilitate the smooth running of the 2008 AGM season.
Companies who wish to use this method need to include certain wording in their AGM notice and other documents. The note is of particular relevance to registrars, lawyers and issuers who will be the first point of contact for shareholders seeking advice on these issues.
Roger Dickinson ICSA’s Chief Executive commented ‘The ICSA is grateful to those who helped to develop this note which will assist in the smooth running of the AGM season this year’
A spokesman from the Department of Business Enterprise and Regulatory Reform (BERR) added ‘This is a complex area and BERR welcomes ICSA's initiative in convening a working group to produce this practical guidance in time for the 2008 AGM season’.
The guidance note is one of a series that ICSA is publishing on the Companies Act and can be downloaded from the ICSA website at www.icsa.org.uk
For further information please contact Rosie Hamilton on 0207 612 7062 or Catherine Wright on 0207 612 7039
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