By WILLIAM JIMOH

Annual General Meeting, AGM, is a platform where the Board of Directors of companies explains the activities and financial position of their companies for a particular financial year end to shareholders.

The shareholders during the AGM have opportunity to interact and contribute ideas that could help the Board and management in running the affairs of the company.  

The shareholders also assess the performance of their companies for the particular year under review.

The Companies and Allied Matters Act, CAMA, 1990 mandate companies to hold AGM at least once in a year.   In an interview with shareholders during the 1st African Prudential Registrar Plc AGM in Lagos, they bare their minds on why AGMs are sometimes rowdy. Excerpt:

Chief Sotude Sopeju, President, Bicorn Shareholders Association of Nigeria:

“The AGM of African Prudential Registrars was going on effectively and in accordance with the laid down regulation until when it came to the election of members of audit committee.

It was at this point that some shareholders decided to impose themselves over the others, such as Sunny Nwosu, who had nominated somebody, Dr Farouk Umar also nominated, and Timothy Adesiyan nominated another person. So, at that point, the shareholders who nominated people started lobbying others and the meeting became rowdy.

“The noise at the meeting escalated at this point since the minority shareholders wanted their voice to be heard. We should note that as there are so many political parties in Nigeria, so it is with shareholders associations.

There are about 50 registered shareholders associations with varying interests to protect, which if the company chairman had put into consideration, the problem would have been abated.

So, when the three influential shareholders went to the Board of Africa Prudential Registrar, they thought they   will stage manage the election and all other things that concerns today’s meeting, but it got to a point during the meeting when the whole process became so rowdy and uncontrollable.

Chairmen of companies tend to forget that there are so many shareholders group in the country with different interests. So, they allow few shareholders groups’ chairmen to dominate the meeting at the expense of others.

But, this is not supposed to be so. Even as influential as they are, the chairperson of the company should be able to say, please Mr. Sopeju don’t come over to the podium, if you have anything to say you will be called upon to speak.

The chairperson should be able to stop any of such attempts by leaders of shareholders groups and let them say what they intend to say from where they are. So, these are the issues the chairmen need to give utmost attention to because when that is done, the meeting will move on smoothly.

When shareholders are demanding for certain things, it is in the CAMA and we know it and you will understand it is their right.

Audit committee position is a statutory function Godwin Anono, Chairman, Standard Shareholders Association of Nigeria:

Today’s AGM became rowdy in view of the fact that a shareholder asked for a poll in the election of audit committee. As much as I understand, there is no room for poll in the election of audit committee.

The audit committee has been there all these years, and I have spent over thirty years in this capital market and I am also a member of audit committee in an insurance company. It is always by showing of hand.

But what we have now is that two shareholders came out calling for poll when we have not even attempted raising our hands. And the rule for a poll is that if two people are calling for poll, both of them must have 10 percent of the total share of the company before their poll will be recognised.

Somebody cannot just jump up and said yes, Mr. chairman, I call for a poll. Do you know how much share he has? When you talk about poll, you are talking about number of shares. Election into the audit committee of companies, all these years I have been in the market has been by raising of hands.

But coming down here today, they are talking about poll and these people who are asking for poll don’t even have up to 1000 units of shares and that is why majority of the shareholders are saying No,   it is by showing of hands but the management refused to go by showing of hands.

Audit committee is a statutory function placed in the hand of the minority shareholders to vote somebody that is going to represent their interest in the company.

This is the company’s first AGM, but see the way things have gone. The chairperson is not competent to handle the meeting, everywhere looks rowdy, and there is no procedural arrangement in the conduct of the meeting.

The person they are trying to impose is among those nominated and we have got the insider information about it and we are saying this is not INEC or party election where you can impose somebody on the investors.

The system does not provide for poll, it only allows that in the issue of directors who are seeking to be a member of the board and, we can use the poll system because of the volume of shares the directors have. But the issue of audit committee is a plain ground for everybody to come and participate.
Our concern is to ensure that election into audit committee is free and fair Dale Joseph, practicing accountant and a shareholder

It has some implication on investors’ confidence in the market or the reputation of the company when audit committee is not properly constituted. Though, this is just shareholders matter, but it must be organised properly in accordance with the rules.

What brought about the rowdiness was because we are trying to ensure that the election of the audit committee follow due process, that is, what the law stipulates in terms of the audit committee election.

We understand from the law that there should not be secret ballot and the contestants must be given equal chance to participate in the election. In other words, the election should be free and fair and that is why when we see that some people are trying to impose people on us, we revolted.

The problem is not really with this company but from our fellow shareholders. Some people will want their members to dominate at the expense of others; they can go to any length to mobilise their members to attain this.

Whereas, what the corporate governance code says is that audit committee members should be knowledgeable, having accounting background.

To ensure that such laid down standards are followed to the letter, that was why we came up and said, instead of not following the code by allowing those that are qualified for the position, we rather go by poll.

Legally, there can only be room for poll, if rasing of hand fails Ayanwamide Kayode, CEO/ Vice President, Breadfruit Elders Shareholders Association of Nigeria

The law actually allows that three shareholders can come up and call for a poll in this kind of a situation. One person will announce in agreement with the second supporting then he will mention the name of the third person supporting.

But the problem here today is that we are hearing that the board of directors has their own candidate and that is the reason why they requested and insisted on poll and in order to achieve this, they are using some shareholders who moved the motion.

But according to CAMA, the first statement there is that when it comes to the election of the audit committee, it is by the raising of hands, but if there is trouble, shareholders can call for poll.

But we have not done that of the showing of hands and we cannot say there is any trouble with it and without doing it, some shareholders are now requesting for poll. In this kind of a situation, it is left to the chairman to decide and she said the election will be by poll and because the majority of the shareholders want it to be by raising of hands, that is why you have all this rowdiness during the meeting.

The implication of this disagreement is that if all the shareholders should go out of this meeting without resolving this issue, the company will have to call for another AGM where only this issue will be on the agenda or they will leave the audit committee position blank for the year.

This is because the Board cannot do anything on that issue without shareholders’ knowledge.