AGM: ICSAN makes recommendations on CAC guidelines
The Institute of Chartered Secretaries and Administrators of Nigeria (ICSAN) has made recommendations to help Public Limited Companies (PLCs) manage the guidelines issued by Corporate Affairs Commission (CAC) on Annual General Meetings.
Mr Bode Ayeku, President ICSAN made the recommendations in an executive report on Thursday in Lagos.
The report is titled, “How to Manage the Unintended Consequences of the Guidelines issued by the CAC on holding of AGMs of PLCs using proxies”.
Ayeku said the recommendations became necessary to address some of the contentious areas of the CAC Guidelines.
The ICSAN president said it was also to address their effects on the existing provisions of the Companies and Allied Matters Act (CAMA) and the rights of the shareholders.
He detailed guidelines which states that companies can hold their AGMs by taking advantage of S.230 CAMA on the use of proxies; that the approval of the CAC shall be obtained before such a meeting is held; and right of CAC to issue the guidelines as some of the consequences.
“On March 26, 2020, the Corporate Affairs Commission (CAC) in a bid to assist public companies hold their AGMs as planned in the first half of 2020, issued a circular.
“The Circular demonstrated that CAC identified the restriction on mass gathering of not more than 25 persons as the major problem that would make it difficult for public companies with thousands of shareholders to hold their planned AGMs in the first half of 2020.
“Consequently, CAC took the decision to solve the problem on how to protect the interest of the shareholders unable to attend the AGMs.
“With due respect, CAC has no power under CAMA to issue the Guidelines impliedly altering the provisions of the law on how an AGM should be held; issues to be discussed; rights of shareholders or to compel shareholders to appoint proxies.
“Even if the Guidelines were to be referred to as “Regulations” and issued by the Minister under S.16 of CAMA, such regulations could not have amended the provisions of CAMA,” he said.
The ICSAN President advised companies that had scheduled their AGMs and published their details to postpone until after COVID-19 is brought under control.
For public companies yet to fix a date, he appealed they also wait.
He advises them to wait until a time there was clarity on the level of success achieved in the fight against COVID-19 and there was no restriction on movement in the state where the AGM would be held.
“After all, all companies have an interval of fifteen months between the last AGM held in 2019 and the AGM to be held in 2020,” he said.
He urged government to enact a law on COVID-19 covering various sectors and authorising companies decisions on shareholders participation in company meetings.
“Switzerland adopted the approach when it issued the Ordinance titled “Ordinance on Measures to Combat the Coronavirus COVID-19” of March 13, 2020 for a maximum period of six (6) months,” he said.
For AGMs to be held if provisions of such Ordinance are adopted, Ayeku urged companies to consider using offices for the AGMs, complying with safety directives, instead of booking bigger and expensive venues.
“Also, shareholders should take advantage of the right given to them to ask questions in writing prior to the AGMs by sending such questions to the registered office, at least a week before the meeting, and the Chairman of the Board should try to respond,” he advised. (NAN)
