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Extraordinary General Meeting (EGM)

Contents

  1. Understanding Extraordinary General Meetings (EGMs)
  2. Differences Between AGMs and EGMs
  3. Example Case: London Stock Exchange (LSE) EGM
  4. Exploring Annual General Meetings (AGMs)
  5. Regulatory Framework for AGMs

Demystifying Extraordinary General Meetings (EGMs): A Comprehensive Overview

Extraordinary General Meetings (EGMs) serve as crucial events in the corporate world, addressing urgent matters that arise between scheduled Annual General Meetings (AGMs). In this comprehensive guide, we'll delve into the intricacies of EGMs, from their significance to their procedures and examples.

Understanding Extraordinary General Meetings (EGMs)

While Annual General Meetings are regular occurrences, Extraordinary General Meetings provide a platform for addressing pressing issues that cannot wait until the next AGM. These meetings, also known as special or emergency general meetings, enable shareholders and executives to convene on short notice to tackle critical matters.

Key Insights:

  • EGMs are called for urgent matters between scheduled AGMs.
  • They may involve issues like executive removal or legal matters.
  • EGMs offer flexibility in scheduling, including holidays, unlike AGMs.

Differences Between AGMs and EGMs

Unlike AGMs, which adhere to strict scheduling and agenda guidelines, EGMs provide more flexibility. They can be convened to address specific issues such as executive dismissals, legal disputes, or any matter demanding immediate attention. Additionally, while AGMs are typically held during business hours, EGMs can occur at any time, including holidays.

Example Case: London Stock Exchange (LSE) EGM

A notable example of an EGM occurred at the London Stock Exchange (LSE) in December 2017. The meeting was called amid controversies surrounding the removal of the company's chief executive. Despite occurring on a regular business day, the meeting drew significant attention and shareholder involvement, showcasing the importance of EGMs in corporate governance.

Exploring Annual General Meetings (AGMs)

In contrast to EGMs, AGMs are regular, mandatory gatherings of a company's shareholders. These meetings serve as forums for discussing the company's performance, strategy, and key decisions. Shareholders exercise their voting rights on various matters, including board appointments, executive compensation, and dividend policies.

Regulatory Framework for AGMs

Public companies are subject to stringent regulations regarding AGMs, including filing annual proxy statements with regulatory bodies like the Securities and Exchange Commission (SEC). These statements provide shareholders with vital information about the meeting, including agenda items, executive compensation details, and director nominations.