Antrim’s discovery of a “proxy tabulation error” sent a shiver down the spine of those of us who attend corporate meetings. Resolutions are easier to calculate than oil reserves, but it’s still no game for amateurs.
Antrim Energy’s shareholders thought they had resolved to appoint a chairman in December.
By Hogmanay the person they thought they had in place had been invited to “resign” due to what was referred to as a “proxy calculation error”. Instead of receiving the reported nearly 80% of the vote he actually received nearer 21%. Unlike for oil reserves, reporting resolutions is not supposed to be a “probable” against “possible” exercise.
In the line of duty I officiate at a lot of directors, shareholders and other such meetings and attend many more. Just like during airplane safety briefings, there is rarely one hundred percent attention given by those present.
Also like on an aircraft, things don’t go wrong very often but when they do the consequences can be significant. UK law has relatively recently relaxed the requirement to have Company Secretaries, but that doesn’t mean you don’t want or need one present. If they made pilot licences optional would the passengers take turns flying the plane?
Antrim did use an agent; maybe they were just a victim of bad luck. But their experience should remind us all that corporate meetings need to be handled with care. Credit to Antrim for at least taking a vote.
There is a practice creeping in to just obtain a proposer and seconder for resolutions and dispense with a vote. This is presumably on the basis that the chairman thinks he can predict the outcome, and voting somehow seems distasteful.
But meetings are constitutionally and democratically the time for those present to stand up and be counted (in addition to the proxies). For or against. If you are too shy to vote don’t be a director or corporate representative.
Meetings should be correctly convened, accurately recorded, director’s interests noted, quorum checked and, yes, proxies counted. There is also an armful of documentation that should be available for inspection at many meetings – not least the constitution/articles of association that the participants should be complying with.
All routine but important tasks that should be meticulously and accurately executed and checked. On planes, do you think they cross-check the doors because they haven’t done it before?
We have enough challenges this year without being caught out by procedural errors. Pilots make errors too, but I still want one in the cockpit. Make good corporate resolutions one of your New Year’s Resolutions.
Peter Murray is a partner at Scottish law firm Ledingham Chalmers where he specialises in UK corporate law and international projects.
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