|The company tables separate resolutions at general meetings of shareholders on each substantially separate issue unless the issues are interdependent and linked so as to form one significant proposal. Where the resolutions are “bundled”, the company explains the reasons and material implications in the notice of meeting.|
This Provision describes the use of resolutions at general meetings.
The input and decisions of shareholders at general meetings are usually conducted through resolutions, or proposals that are submitted for a vote. A resolution can be ordinary (requires a simple majority to pass), special (a three-quarter majority to pass), or advisory (non-binding on directors and the company).
Once a resolution is passed, the directors and the company are obliged to implement it, except for an advisory resolution.
A resolution should relate to a discrete item. It should not be bundled with other resolutions unless they are truly interdependent. For example, in the election of Board members, each Board member should be represented by a separate resolution because Board members are appointed in their individual capacities and not as a team.
When resolutions are bundled, they effectively prevent shareholders from making different decisions on the individual parts. This could result in the perception that the company is attempting to unfairly push an unfavourable agenda.
In general, resolutions should not be bundled or made inter-conditional on each other. This is to ensure that shareholders are given the right to express their views and exercise their voting rights on each resolution separately. However, in situations where resolutions have to be inter-conditional, such as in meetings to approve a reverse takeover, the company should clearly explain the reasons for, and key implications of, bundling them.
B. Practice Guidance
C. Related Rules and Regulations
D. CG Guides
- Board Guide Appendix 7F: General Meetings of Shareholders [Stakeholder Engagement].
E. Related Articles