An Annual General Meeting (AGM) is a yearly meeting of a company and its shareholders. These meetings are a means for shareholders and directors to highlight and discuss crucial business matters. The meeting can be held in person or on a virtual platform, depending on the company’s byelaws and local legislation.
What is the purpose of the AGM?
An AGM offers a platform to discuss the strategic direction of the company. This report is often delivered by the CEO or COO.
The annual meeting is also used to highlight the company’s activities and performance in the past year. This includes successes, failures and other hallmark events. The discussion helps to inform board members and shareholders of the company’s latest developments.
AGMs also allow shareholders to express their concerns and have their questions answered by the board. Shareholders can also vote for or against measures such as director remuneration.
Key elements of an AGM
These are the key elements of an AGM:
- Chairperson’s Address
An AGM generally begins with the board chairperson’s address — a comprehensive overview of the company’s performance, strategy and key developments in the past year.
- Financial presentation
In an AGM, board members present news of the company’s financial health to shareholders, including income and cash flow statements and balance sheets. This presentation offers valuable insight into the company’s economic situation and its proximity to fiscal targets.
- Resolutions and voting
Voting is a critical aspect of AGMs — these meetings are the most common way that shareholders get to guide the direction of the board. Typically, they will be notified of the matters to vote on ahead of time. This way, they can gather all the relevant information needed to make an informed decision.
During AGMs, shareholders might vote on the appointment of external auditors or whether to re-elect or continue the tenures of specific board members. A quorum must be established before any business can be conducted.
Shareholders are given time to ask questions and seek clarifications on pressing company matters during an AGM, promoting transparency and shareholder engagement.
Another key element of an AGM is reports. Various executives, including the CEO and COO, present reports to give shareholders a deeper look into the company’s current health.
Preparation and notice for an AGM
The AGM is announced via a formal notice distributed at least 21 days in advance. Shareholders should be notified in line with legal and regulatory requirements.
Companies should create a comprehensive agenda covering all the meeting proceedings, including financial reports, elections, appointment of auditors and any other business, and distribute it to shareholders.
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