An Overview on the Management of Meetings  CALVIN NYACHOTI

Content Introduction Purpose of meetings Common Principles Types of Meetings Legal provisions on Meetings 2

Introduction Within the context of corporate governance, meetings are basically democratic decision-making occasions. by which means the exercise of fairness, reasonableness and good faith finds expression to all who are entitled to be in attendance. A meeting therefore is the act or process of coming together of two or more people as an assembly for a common purpose usually the verbal interaction, such as sharing information or reaching agreement for a common purpose. Traditional standards generally entailed the physical assembly of persons but advances in technology have meant virtual meetings – thro’ teleconferencing or video links possible and legitimate. What of one director companies? 3

Common Principles The same broad principles apply to all meetings generally be they of associations, corporations or the different types of meetings within these institutions. For instance, the essentials of a valid meeting are: a sufficient number to form a quorum; adequate notice of the meeting must be given; no person entitled to be present may be excluded; Someone is presiding over the meeting; Another is recording the proceedings of the meeting; Business is conducted according to specific rules. 4

Types of Meetings Statutory Meetings Applicable to public companies limited by shares Happens once in the company’s lifetime. Must be held within 1-6 months of the company’s commencement of business. Generally to familiarize members with important information on the company e.g. shares taken up, money received, contracts entered into etc. Members must be presented with a statutory report. Annual General Meetings Held annually as the name suggests. Slightly relaxed for newly established corporations which are allowed up to 18 months from incorporation. Notice of at least 21 days, which must state its an AGM sent to all entitled to attend including the statutory auditor. Usually held in the city/town where company is registered and within business premises. 5

Types of Meetings (II) Minimum agenda (ordinary business) must contain: Consideration of Annual Accounts, Director’s report and Auditor’s reports on the accounts Declaration of dividends Appointment of directors in place of those retiring Appointment and fixing of remuneration of auditors. For any other special business there must be an explanatory statement of the special business. Notice may be sent by post and service is effected by addressing, pre-paying and posting notice. Members entitled to vote may send proxy before the meeting. Extraordinary General Meetings Commonly simply known as a general meeting. Is any other meeting other than an AGM or statutory meeting or an adjournment thereof. Usually convened by the Board of Directors to discuss urgent matters that may not wait till the next AGM. May also be requisitioned by minimum number of members or holders of certain minimum shareholding as specified in the Memorandum and Articles of Association. Each business item discussed is special business and an explanatory statement is sent together with the notice. 6

Types of Meetings (III) Board and Management Meetings The general meeting is the principal agency for the members, by resolution, to reach a decision; At the general meeting, the members appoint directors, to whom are generally delegated all powers of management; Directors usually make their decisions at board meetings. The board should think and act as one body and not as a collection of individuals. The board or management committee must meet regularly, retain full and effective control over the company and monitor the executive management. The executive management may also regularly hold meetings for purposes of execution and implementation of board resolutions. 7

General Aspects of Meetings Quorum Minimum number of members to constitute a valid meeting. Required only at the beginning of the meeting. The number is generally specified by the articles. Conflicted members or non-voting members do not constitute quorum. Decisions taken without quorum are invalid and non-binding. Otherwise meetings may be adjourned to such other agreed time and if no quorum, then whatever number of members constitute quorum for the meeting. Proxy A person appointed by a member to attend and vote on his behalf. Must be in writing, signed by the member Has to be deposited with the company or requisite person. Can be a member or non-member. Entitled to vote on a poll and not a show of hands. 8

General Aspects of Meetings (II) Resolutions Decisions taken at meetings. Ordinary resolutions – requiring simple majority Special resolutions – requiring two thirds majority e.g. to alter domicile, name, articles of a company etc. Adjournment Suspending proceedings of the meeting to be continued at a later fixed time. If adjourned without stipulation as to when to meet (adjournment sine die), then fresh notice must be issued. Chairman may adjourn with the agreement of the members. May also be moved by a majority of the members. Only unfinished business discussed at the original meeting may be transacted. Postponement The convener of the meeting for one reason or another defers it to a later date 9

Legal Provisions on Meetings 10

Legal Provisions on Meetings Kenya finally embarked on long overdue transition to modern company and solvency law with Companies Act 2015 and Insolvency Act, Act draws heavily on the Companies Act, 2006 with a 9 month implementation period. Include subsidiary legislation and setting up or reforming of institutions necessary for its implementation. Two regimes: lighter-touch regime for regulated aspects of private companies to reduce time and cost and heavier scrutiny and accountability for publicly owned/listed companies. 11

Shareholding Meetings Shareholders’ written resolution in private companies – no requirement for unanimity. All that is required is a simple majority similar to that of a shareholding meeting for normal meetings or 75% for special resolutions. Abolition of AGMs for private companies although they can elect to pride for them in their articles. Short notice of meetings in private companies where consent by holders of 90% by nominal value of shares carrying the right to vote. 12

Shareholder Meetings II Notice of AGM may be given in hard copy or electronic form including a website. No provision for issuance of notice by newspapers as was previously the case. A public company shall hold an AGM within 6 months from the end of its financial year. Shareholder communication – Act makes provision for electronic communication to shareholders. 13

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Q & A 15