How to vote

FAQs

• What is an AGM?

  An AGM is an annual gathering of a company’s shareholders. This is shareholders’ opportunity to hear directly from the directors about the company’s performance and strategy, with the opportunity to ask questions and challenge them. At a listed company’s AGM, shareholder have the right to vote on important decisions affecting the company’s life – directors and their fees, issuing shares. Sometimes shareholders even decide whether the company should continue in existence.

• What is a proxy form?

  Prior to their AGMs, the trusts will publish detailed information about when and where their AGMs are to be held, and what will be covered at the meeting. Find out more about AGMs and voting from the FAQs below.

• Why does the proxy form give me the option to appoint the chair of the meeting?

  So that your votes count at an AGM, you need to name someone in the proxy form who can vote on your behalf. If you do not know anyone going to the AGM, then you can appoint the chair of the meeting to vote for you. When you fill in the proxy form, you can say exactly which way you want them to vote, or if you do not mind, you can leave it open. If you do not tell them exactly how to want them to vote on each resolution, the person you have appointed will decide for themselves whether to vote for/against/abstain (also called ‘discretionary votes’).

• What are ordinary resolutions?

  These tend to be the simplest votes, like for appointing directors and auditors. To pass an ordinary resolution at a shareholders’ meeting, just over half of votes need to be cast in favour (a ‘simple majority’)

• What are special resolutions?

  These are decisions that are more sensitive or important, so more votes in favour are needed for them to be passed – 75%. This higher threshold protects smaller shareholders and minority interests. Significant changes to the company need a special resolution, like changing its name, changing its articles of association, and allowing the company to buy back its shares.

• What do the resolutions about issuing shares and disapplying pre-emption rights mean?

  Listed companies need to ask shareholders each year to allow them to create and ‘issue’ (or ‘allot’) new shares.

  Listed companies need to also ask for approval to be able to issue these new shares without having to offer them first to existing shareholders – this is what the resolution to ‘disapply pre-emption rights’ means. If pre-emption rights are not removed, new shares in a company cannot be offered to other potential investors without current shareholders having the right of first refusal.

• Why is the company asking me for approval to make market purchases of its own shares?

  This is a resolution that allows listed companies to buy their own shares back from existing shareholders. The company can buy the shares at the current market value or higher, and then destroy them or hold them in a separate account called ‘treasury.’ If a company holds shares in treasury, it becomes a shareholder in itself, but those shares do not give the company any voting or dividend rights. Buying back some of its shares means there are fewer shares left available in the market and so that can increase the value of remaining shares.

• What is voting on a poll vs voting on a show of hands?

  Voting on a show of hands is when shareholder vote by raising their hands. Votes are open and nothing is secret. Proxies do not count. ‘One person, one vote’ is the principle. But it’s becoming more and more common to vote on a poll, especially for listed companies.

  Voting by poll is when every shareholder at the meeting is given a paper (or a device) to record their votes according to the number of shares they hold. There is complete secrecy. Proxy votes are included, so ‘One share, one vote’ is the principle.