On 28 January 2008, the Institute of Chartered Secretaries and Administrators (ICSA) published a guidance note highlighting certain legal and practical issues that arise following the implementation, on 1 October 2007, of those provisions of the Companies Act 2006 (the Act) relating to proxies and corporate representatives.
The ICSA paper contains guidance in a number of areas that should help companies, shareholders and advisers get to grips with the new provisions.
Multiple corporate representatives
One area that the paper seeks to address is the uncertainty surrounding the new provisions enabling corporate shareholders to appoint multiple corporate representatives. While section 323 of the Act allows a corporate shareholder to appoint multiple corporate representatives, there is concern that, where a shareholder has appointed more than one corporate representative and those corporate representatives then vote in different ways, section 323(4) could have the effect of nullifying their votes.
In view of these concerns, ICSA suggests that corporate shareholders wishing to attend, speak and vote at general meetings should either (i) appoint one or more proxies or (ii) appoint a single corporate representative. If neither of those options is possible (because, for example, the deadline for return of proxies has been missed), the ICSA paper outlines a possible alternative which companies may wish to make available to shareholders at their general meetings – this "Designated Corporate Representative" alternative is outlined in some detail in section 4.8 of the paper.
We understand that investor groups, companies and other interested parties are pressing for the law to be amended and clarified in order to remove the current uncertanties.
The full text of the ICSA guidance note can be found here