Regulator’s Column: SGX RegCo Requires Large Issuers To Take Lead To Reduce AGM Crunch

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AGMs – Enabling Shareholders to Participate

An issuer’s annual general meeting (“AGM”) is an event keenly anticipated by many shareholders in each calendar year. AGMs serve as an important platform to enhance communication between shareholders, and the issuer’s board of directors (“Board”) and management. It provides an avenue for shareholders to receive updates from the Board and management, vote on key matters as well as engage in direct dialogue with them. It is therefore important that shareholders can attend the AGMs of all the issuers that they hold shares in.

To facilitate interaction with shareholders, the SGX-ST Listing Rules further prescribe certain requirements relating to general meetings, including requiring primary-listed issuers to hold their AGMs in Singapore, unless prohibited by relevant laws and regulations in its jurisdiction of incorporation. In line with this, SGX RegCo, together with the Securities Investors Association (Singapore) and the Singapore Institute of Directors, have also published the second edition of the Guide on Best Practices for Shareholder Meetings of Listed Companies (available here).

Providing shareholders with the opportunity to participate effectively in, and vote at, general meetings is a principle echoed in the Code of Corporate Governance. The accompanying Practice Guidance to the Code of Corporate Governance also provides that companies should use their best endeavours to avoid scheduling general meetings during peak periods.

Singapore Exchange Regulation (“SGX RegCo”) observes that shareholders’ ability to attend AGMs may be curtailed, if AGMs are clustered within the same period. As most issuers have their financial year-end in December, the peak period in which issuers schedule their AGMs is typically in the second half of April, i.e., the two weeks immediately preceding the deadline in April for holding of AGMs.

Reducing the AGM Crunch

SGX RegCo recognises that it may not be possible to entirely eliminate the issue of AGM clustering given the number of issuers with the same financial year end. About two of every three issuers have a 31 December financial year-end. Nonetheless, arrangements can be put in place to ameliorate the situation. In this regard, clustering of AGMs by issuers with a larger shareholder base and market capitalisation, such a...

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