The Nigerian Corporate Affairs Commission on 26th March 2020 released the Guideline on holding of Annual General Meetings (Agm) of public companies using proxies.
The guideline provides that in view of the COVID-19 pandemic, companies can hold their Annual General Meetings by taking advantage of S.230 Companies and Allied Matters Act (CAMA) on the use of proxies. The guideline makes the following provisions:
- The approval of the Corporate Affairs Commission (CAC) shall be obtained after submission of application to the Head office in Abuja before the AGM is held meeting is held.
- CAC shall send representative(s) as observer(s) to the meeting.
- The meeting shall only discuss the Ordinary Business of an AGM as provided in S.214 CAMA. Ordinary business to be discussed in accordance with S.214 are declaring a dividend, the presentation of the financial statements and the reports of the directors and auditors , the election of directors in the place of those retiring, the appointment and the fixing of the remuneration of the auditors and the appointment of the members of the audit committee.
- Notice of meeting and proxy form shall be sent to every member in accordance with the requirements of CAMA. Companies will be required to provide the CAC with the evidence of postage or delivery of such notices after the meeting.
- All the members shall be advised in the notice that in view of the Covid-19 pandemic, attendance shall only be by proxy with names and particulars of the proposed proxies listed for them to select therefrom. The invitation shall be issued at the companies’ expense as well as the stamp duties which shall be prepaid by the company. The proxies need not be members of the company.
- The company shall be guided by the provisions of its Articles or CAMA as regards to a quorum. However, for the purpose of determining quorum, each duly completed proxy form shall be counted as one.
Section 230 of the Companies and Allied Matters Act provides that any member of a company entitled to appoint another person (whether a member or not) as his proxy to attend and vote instead of him, and a proxy appointed to attend and vote instead of a member shall also have the same right as the member to speak at the meeting.
By the above provision, proxies are persons whether members or not appointed to act instead of a member. Going by the provision of the guideline, the attendance of the Annual General Meeting shall be by proxy only, thus enabling members that cannot physically attend the meetings to appoint representatives.
Having regard to the government restrictions on physical gatherings to prevent transmission of Covid-19, the use of proxies is no longer a viable solution for public companies. The CAC should suspend compliance of CAMA provisions where compliance has been rendered impossible by the Covid-19 pandemic.
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