What Is an Extraordinary General Meeting (EGM)?
Let me explain what an extraordinary general meeting, or EGM, really is. It's a meeting you call when there's something urgent that just can't wait until the next annual general meeting, or AGM. We're talking about big decisions, like kicking out an executive or sorting out some pressing legal stuff. You know how AGMs are all planned out and happen on a set schedule? Well, EGMs are different—they can pop up anytime, even outside business hours or on holidays, because urgency doesn't care about the calendar.
Key Takeaways
- An extraordinary general meeting (EGM) is called to address urgent matters that arise between scheduled annual general meetings (AGMs).
- EGMs can involve urgent issues like the removal of an executive or pressing legal concerns.
- Unlike AGMs, EGMs can be held on any day, including national holidays, and may be initiated by shareholders or a tribunal.
- The London Stock Exchange’s 2017 EGM is an example where the meeting was convened to discuss the potential removal of its chair.
- An AGM is a mandatory event where shareholders discuss the company's performance, vote on issues, and receive information about the company's future strategy.
How EGMs Operate and Their Importance
In most companies, the main time you as a shareholder or executive get together is at the annual general meeting, which is locked in on a specific date and time each year. But sometimes, things come up that need immediate attention, especially around company management. That's where the EGM comes in—it's your way to gather everyone on short notice to tackle these urgent issues between the regular annual meetings.
You might call an EGM for reasons like removing an executive, dealing with a legal matter, or anything else that can't hold off until the next shareholders' meeting. Remember, AGMs have to happen during business hours and not on holidays, but EGMs? They can be anytime, even on a holiday. And while only the board can call an AGM, you as a shareholder, or even a requisitionist or tribunal, can request an EGM.
Case Study: London Stock Exchange's December 2017 EGM
EGMs happen for all sorts of reasons, but a common one is to consider ousting an executive. Take the London Stock Exchange, or LSE, in December 2017—they held an EGM over claims that chair Donald Brydon had pushed out former CEO Xavier Rolet, who stepped down early that November.
Even though EGMs can be outside normal hours, this one was on a regular Tuesday, not a holiday. It was triggered by activist investor The Children’s Investment Fund Management, or TCI, which got 20.9% of votes in favor of removing Brydon. In the end, though, the EGM voted to keep him in place.
Contrasting EGMs With Annual General Meetings (AGMs)
An annual general meeting, or AGM, is that required yearly get-together for a company’s shareholders. At these, the directors lay out a report on how the company's doing and what the strategy is moving forward.
If you have voting rights as a shareholder, you get to decide on things like who’s on the board, executive pay, dividends, and picking auditors. The rules for AGMs depend on where the company is incorporated—many places require them for both public and private companies, but public ones have tougher regs.
Public companies have to file annual proxy statements with the SEC, called Form DEF 14A. This filing tells you the date, time, and place of the meeting, plus details on executive comp, any big issues for shareholder votes, and nominated directors.
The Bottom Line
An extraordinary general meeting is your essential tool for dealing with urgent issues that can't wait for the AGM. It covers critical stuff like removing executives or facing legal challenges. Unlike AGMs with their strict schedules, EGMs give you flexibility—they can happen anytime, even on holidays. If you understand how AGMs and EGMs work and what rules apply, you'll navigate corporate governance better and make smarter decisions when things get pressing.
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