Our trend report looks at the most recent changes to the UK Corporate Governance Code, the Listing Rules and legislation that are relevant to the 2016 annual general meetings (AGMs) of companies in the FTSE 350. It also considers developments in institutional investor guidance and emerging best practice at AGMs.
In particular, the report suggests that a FTSE 350 company preparing for its 2016 AGM should focus on:
- the requirement to send its AGM notice and related papers to its shareholders at least 20 working days before the AGM (unless there is a urgent need for it to use the shorter notice periods permitted by the Companies Act 2006)
- the disclosures required in its annual report on the going concern basis of accounting, risk management and internal control
- the need to include a statement of compliance with the requirement to conduct an audit tender in its audit committee report (or annual report, as relevant)
- the explanation that must be given if a significant proportion of votes against any resolution is received
- any disclosures to be made in relation to controlling shareholders and relationship agreements
- any need to comply with the dual-voting regime for electing or re-electing an independent director (ie, if the company has a controlling shareholder)
- the enhanced reporting requirements to be introduced in relation to payment practices and policies, payments to governments and slavery and human trafficking
- its ability to issue non-pre-emptively for cash equity securities representing 10% of its issued ordinary share capital, provided that it confirms that it intends to use 5% of this only in connection with an acquisition or specified capital investment, and
- the new institutional investor guidance issued, including that on multiple directorships, remuneration, share buybacks, audit tender and board diversity
The 2016 AGM season is underway – we hope that our trend report will help companies and their lawyers identify, and understand, the new developments to be considered in preparation for this year’s meeting.