The Corporate Affairs Commission (CAC) has said companies that opt to conduct their annual general meetings (AGMs) through the use of proxies must comply with the relevant provisions of Companies and Allied Matters Act (CAMA) and the guidelines issued by the Commission.
CAC had last weekend issued guidelines on the conduct of AGM through the use of proxy as part of measures to circumvent the disruptions created by the Coronavirus pandemic.
Nigeria heightened its state of emergency as the confirmed cases of Covid-19 continue to rise with Lagos, the nation’s economic centre, remaining the epicentre of the spreading Coronavirus. Lagos State, where most annual general meetings usually hold, has placed restriction of not more than 25 persons on public gathering, automatically closing down large-group assembly like AGM. Most other states are enforcing restrictions.
The average number of shareholders for a quoted company is more than 1,000 and it is estimated that at least 20 per cent of shareholders attend AGM. Besides, representatives of regulatory authorities, professional advisers, independent observers and the mass media also usually attend AGM.
CAC, in a statement, stated that companies can take advantage of Section 230 of the Companies and Allied Matters Act (CAMA) on the use of proxies to hold their AGMs.
The rules on proxy allow shareholders to appoint personal representative or to appoint the chairman of the board or any presiding official or any of the directors of a company to act for them. The rules also allow shareholders to vote on the agenda or resolutions of the meeting ahead of the meeting date by indicating their vote on the proxy form.
Under the guidelines provided by CAC, companies shall obtain the approval of CAC before such a proxy-based meeting is held and such application for approval can be submitted to CAC’s head office in Abuja or any of the branch offices in any of the states.
Such a proxy-based meeting shall only discuss the ordinary business of an AGM as provided in Section 214 CAMA while CAC shall send representatives as observers to the meeting.
The company shall be guided by the provisions of its Articles or CAMA as regards to a quorum. However, for the purpose of determining quorum, each duly completed proxy form shall be counted as one.
According to the guidelines, notice of meeting and proxy form shall be sent to every member in accordance with the requirements of CAMA and the companies will be required to provide the CAC with the evidence of postage or delivery of such notices after the meeting.
“All the members shall be advised in the notice that in view of the Covid-19 pandemic, attendance shall only be by proxy with names and particulars of the proposed proxies listed for them to select therefrom. The invitation shall be issued at the companies’ expense as well as the stamp duties which shall be prepaid by the company. The proxies need not be members of the company,” CAC stated.
Nigeria’s largest financial institution, Guaranty Trust Bank (GTB) Plc, was the first to conduct its AGM under the proxy arrangement. GTB, which had scheduled to hold its AGM in Lagos on March 30, 2020, successfully conducted the AGM by proxy after obtaining relevant regulatory approvals.
GTB explained that it decided on the proxy arrangement to minimise social contact and to allow the bank complies with restrictions on public gathering by the Lagos State Government.
