A. Explanation

This Provision describes how companies should help shareholders exercise their rights at general meetings.

The major forums through which companies formally engage shareholders, and by which the latter exercise their rights, are the general meetings. Of all these rights, perhaps the most powerful is the vote. Through their votes, shareholders can approve, or disapprove, of matters such as the appointment of directors, auditors, the financial report, and other resolutions that are legally required to be tabled to them. In other words, it is mainly through their votes that shareholders exercise their ownership rights and influence how the company is run.

This Provision sets out the need for the company to facilitate the exercise of these important shareholder rights, specifically:

• Being able to attend and participate effectively at general meetings. This can perhaps be achieved through adequate notice, convenient venues, appropriate meeting set-ups, and appropriate meeting procedures that are well communicated.
• Being able to easily vote at the general meetings. This can be achieved through clear voting rules and procedures including the use of proxies, and enhanced voting methods such as electronic voting.

The Practice Guidance suggests that shareholder participation in general meetings can be enhanced if companies use their best endeavours to avoid scheduling meetings during peak periods when the meetings could coincide with those of other companies, especially if they have a large shareholder base. Companies should consider other avenues of engaging shareholders, such as through townhall meetings, briefings and roadshows, or webcasting meetings and allowing electronic online voting of shares.

B. Practice Guidance

• Practice Guidance 11: Shareholder Rights and Engagement

C. Related Rules and Regulations

• Section 64(1) of the Companies Act: Rights and powers attaching shares.
• MR 730A and CR 730A: Facilitating Interaction with Shareholders.

D. CG Guides

• Board Guide 7.2: Shareholders [Stakeholder Engagement].
• Board Guide Appendix 7D: Shareholder Activism [Stakeholder Engagement].
• Board Guide Appendix 7F: General Meetings of Shareholders [Stakeholder Engagement].

E. Related Articles

• “Preparing for the AGM” by Penelope Phoon-Cohen. (446KB)
• “AGMs: What investors want to know” by Terry Wee. (447KB)
• “CA amendments: Less regulatory burden, more flexibility” by Marcus Chow. (47KB)
• “Shareholder activism and how directors can respond” by Jerry Koh. (97KB)
• “Shareholder activism - Shareholder rights and its effectiveness” by Kala Anandarajah. (95KB)