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Principle 5 — Shareholder rights and effective dialogue

Past version: effective from 21/10/2015 - 20/10/2015
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Rule 9.2.7

"The Board must ensure that the rights of Shareholders are properly safeguarded through appropriate measures that enable the Shareholders to exercise their rights effectively, promote effective dialogue with Shareholders and other key stakeholders as appropriate, and prevent any abuse or oppression of minority Shareholders."

52. The Board as a whole has responsibility for ensuring that a satisfactory dialogue with Shareholders takes place. Such dialogue should be based on the mutual understanding of objectives and provision of adequate information relating to the Reporting Entity including financial information, and how the business and affairs of the Reporting Entity are carried out.
53. The Board should hold a general meeting of Shareholders at least annually.
54. The Board should use the annual general meeting to communicate with Shareholders on important aspects of the Reporting Entity's business and affairs and encourage their participation. Shareholders should have the opportunity to ask questions of the Board, to place items on the agenda of general meetings and to propose resolutions.
55. At any general meeting, the Reporting Entity should propose a separate resolution on each substantial separate issue, and should in particular propose a resolution at the annual general meeting relating to the report and accounts. For each resolution, proxy appointment forms should provide Shareholders with the option to direct their proxy to vote either for or against the resolution or to withhold their vote.
56. The chairman should arrange for the chairs of the audit, remuneration, and nomination committees to be available to answer questions at the annual general meeting and for all Directors to attend either in person or by electronic means.
57. Whilst recognising that most Shareholder contact is with the Chief Executive and finance Director, the chairman and other Directors, including non-executive Directors as appropriate, should maintain sufficient contact with major Shareholders to understand their issues and concerns. The Board should keep in touch with Shareholder opinion using means which are most practical and efficient taking into account the nature, scale and complexity of its operations and the nature of its Shareholder base. The Board should use its website as a forum for the posting of information such as new strategies and a calendar for important meetings and other events.
58. The chairman should ensure that the views of Shareholders are communicated to the Board as a whole. In addition, the chairman should discuss the governance and strategy of the Reporting Entity, at least with its major Shareholders. Non-executive Directors should be offered the opportunity to attend meetings with major Shareholders and should expect to attend such meetings, especially if requested by major Shareholders.
59. The Board should ensure that no steps are taken which may prevent Shareholders consulting with other Shareholders on issues concerning their basic Shareholder rights, subject to exceptions to prevent abuse. Similarly, the Board should also protect minority Shareholders from any oppressive or abusive action by controlling or major Shareholders.