Environmental and social transparency under the ... - ClientEarth

136 | Environmental and social transparency under the Companies Act 2006Annex 6: UK law governing company AGMs | 137means a general meeting of the company at which the company’s annual accountsand reports are (or are to be) laid in accordance with this section.The Companies Act 2006 requires that the annual accounts and reportsmust be ‘laid’ before the company in general meeting, which in practicewill be the AGM. There is no legal requirement that the annual reportsneed the shareholders’ approval or acceptance. Shareholders have no legalright to reject them. 342 Furthermore, there is no explicit provision in lawor guidance as to what the process of ‘laying’ the reports involves; whetherthere must be the opportunity for specific discussion of the accounts orreports. However, in practice there will always be the opportunity fordiscussion of the reports at the AGM.As discussed in the main body of this review, the AGM constitutes oneof the key opportunities for the annual accounts and reports prepared bycompany directors to be scrutinized, and the main opportunity for shareholdersto ask questions to clarify and ensure the accuracy and proprietyof reporting. This is extremely important for the proper internal workingsof the company. It is needed to ensure transparency between directorsand shareholders, to encourage shareholders to be engaged and informed,and to provide the opportunity for shareholders to exercise control overtheir investment and the future of the company.A.6.2.2 ResolutionsAt AGMs, resolutions are put to the shareholders for voting, on all mannerof company activities. Resolutions provide an opportunity for environmentaland social matters associated with a company’s activities to bediscussed at the AGM. 343s338 Public companies: members’ power to require circulation of resolutions forAGMs(1) The members of a public company may require the company to give, to membersof the company entitled to receive notice of the next annual general meeting,notice of a resolution which may properly be moved and is intended to be movedat that meeting.(2) A resolution may properly be moved at an annual general meeting unless—(a) it would, if passed, be ineffective (whether by reason of inconsistency withany enactment or the company’s constitution or otherwise),(b) it is defamatory of any person, or(c) it is frivolous or vexatious.(3) A company is required to give notice of a resolution once it has received requeststhat it do so from—(a) members representing at least 5% of the total voting rights of all the memberswho have a right to vote on the resolution at the annual general meetingto which the requests relate (excluding any voting rights attached to anyshares in the company held as treasury shares), or(b) at least 100 members who have a right to vote on the resolution at the annualgeneral meeting to which the requests relate and hold shares in the companyon which there has been paid up an average sum, per member, of atleast £100.See also section 153 (exercise of rights where shares held on behalf of others).(4) A request—(a) may be in hard copy form or in electronic form,(b) must identify the resolution of which notice is to be given,(c) must be authenticated by the person or persons making it, and(d) must be received by the company not later than—(i) 6 weeks before the annual general meeting to which the requestsrelate, or(ii) if later, the time at which notice is given of that meeting.s314 Members’ power to require circulation of statements(1) The members of a company may require the company to circulate, to membersof the company entitled to receive notice of a general meeting, a statement of notmore than 1,000 words with respect to—(a) a matter referred to in a proposed resolution to be dealt with at that meeting,or(b) other business to be dealt with at that meeting.(2) A company is required to circulate a statement once it has received requests to doso from—(a) members representing at least 5% of the total voting rights of all the memberswho have a relevant right to vote (excluding any voting rights attachedto any shares in the company held as treasury shares), or(b) at least 100 members who have a relevant right to vote and hold shares inthe company on which there has been paid up an average sum, per member,of at least £100.See also section 153 (exercise of rights where shares held on behalf of others).(3) In subsection (2), a “relevant right to vote” means—(a) in relation to a statement with respect to a matter referred to in a proposedresolution, a right to vote on that resolution at the meeting to which therequests relate, and(b) in relation to any other statement, a right to vote at the meeting to whichthe requests relate.(4) A request—(a) may be in hard copy form or in electronic form,(b) must identify the statement to be circulated,(c) must be authenticated by the person or persons making it, and(d) must be received by the company at least one week before the meeting towhich it relates.