Transcript Effective Chairmanship of Meetings

EFFECTIVE CHAIRMANSHIP
OF MEETINGS
& PARLIAMENTARY
PROCEDURE
By Lee Swee Seng
LLB, LLM, MBA.
Advocate & Solicitor
Patent Agent & Notary Public
[email protected]
© Copyright Lee Swee Seng
Meaning of ‘Meeting’
An assembly of people for a lawful purpose.
 A valid meeting is one which has been
properly convened and constituted and in
which there is a chairman and from which
no persons who are entitled to attend are
excluded.

Physical Presence at Meeting
Physical presence of people is not always
necessary, as long as the persons whose
concurrence is necessary did so concur by
correspondence, transmission of messages
or by other means.
 Eg. Seal Incorporated Berhad by it's Co's
41st AGM held on 18/12/03, has by a
special
resolution amended its article to insert the
following:

“A director shall be deemed to be present at
a directors’ meeting if his attendance is by
tele-conferencing or video-conferencing or
such other means as provided in art 104”
Malaysian Resources
Corporation Berhad (MRCB)

MRCB by its circular to shareholders dated
4/2/02 proposed to amend the Co’s articles
to incorporate the relevant provisions of the
Listing Requirements as required by the
BMLR, in particular Chapter 7 and other
relevant regulatory requirements
(resolution was approved in the Co's 31st
AGM)
Chapter 7 of the BMLR


7.01(1) - Parts B to N of this chapter set out the
provisions which an applicant or a listed company
must ensure are contained in tis articles of
association and those of its subsidiaries (where
applicable)
7.17 – Notice of meetings shall be given at least
14 days or 21 days before the meeting and where
special business is to be considered, the Notice
must state the effect of any proposed resolution in
respect of such special business.
Circumstances where presence
not necessary



S95(3) Offshore Companies Act 1990 – deemed to
be present at a Meeting if he participates by
telephone or other electronic means and all
members participating in the Meeting are able to
hear each other
Where actual presence cannot be procured (In re
Bonnelli’s Telegraph Co Colliers’ Claim (1871)
LR 12 Eq 246, Sir James Bacon VC)
Art 90, Table A – resolution signed by all
directors is valid and effectual as if it had been
passed at a meeting of directors duly convened
and held
Meetings of Bodies Corporate
Creatures of Statutes
 Eg. The Bar Council must act and conduct
their affairs within the framework of the
Legal Profession Act 1976, the Local
Authority under the Local Government Act
1976, and the Securities Commission under
the Securities Commission Act 1993.

General Types of Meeting
Statutory Meetings-eg Company Act
 Committee Meetings and sub-committee
meetings.
 Informal Meetings eg dialogues
 Formal Meetings eg conventions,
conferences and congresses.
 Impromptu Meeting.

Types of Company Meetings
under the CA
Board of Directors Meeting/ Committee
Meeting
 General Meeting (AGM & EGM)
 Class Meeting
 Statutory Meeting under s142 CA
 Power of Court to convene meeting under
s150

Board of Directors Meeting/
Committee Meeting
-
-
Table A, art.83 – the quorum necessary
for the transaction of business of the
directors may be fixed by the directors
Table A, art. 86 – the directors may
delegate their powers to the committee
consisting of such member or members of
their body they think fit.
Annual General Meeting

S143 CA1965 - Must be held once in every
calendar year and not more than 15 months
from the last preceding AGM
Annual General Meeting

Business transacted at the AGM (Table A, art
46):- declaration of dividends
- presentation of audited accounts(s169(1)CA)
- Consideration of balance-sheets
- Consideration of director’s & auditor’s report
- election of directors, and
- appointment of auditors and fixing auditor’s
fees(s172(2)CA)
Audited Accounts s169(1)

The CA does not require members to
approve the accounts. All that needs to be
done is that the accounts are laid before the
general meeting.
Extraordinary General Meeting
Table A, art.43 – the provision to convene
an EGM is usually stated in the company’s
articles
 Business transacted at the EGM - Increased
in Authorised Capital, Change in Name of
the Company, alteration of company’s
articles, appointment of managing director,
enabling resolution for charge creation.

Class Meeting

these are meetings of the holders of a class
of shares of a company, for e.g. Preference
shares, redeemable preference shares, class
A ordinary shares etc.
Statutory Meeting under s142 CA
S142 CA 1965 – to be held not less than 1
month and not more than 3 months after the
date at which it is entitled to commence
business (for the adoption of statutory
report)
 S142(2) CA 1965 – statutory report to be
forwarded to every member at least 7 days
before the meeting
 Statutory report shall state the shares
allotted and cash received. See s142(3) CA
1965 for contents of the Statutory Report

Power of Court to Convene Meeting

S150 CA 1965 – The Court, either on its
own motion or on the application of any
director or any member entitled to vote at
the meeting, may call for an AGM or EGM
or class meeting
Power of Court to Convene
Meeting
Where it is impracticable
 Where there is only one member present in
person or by proxy
 Where affairs of the company would be
paralysed
 Where statutory duties have to be
discharged

Cases utilising s150 CA

Low Son Siang v Lee Kim Yong [1999] 1
CLJ 529 - there were only 2 shareholders in
the company, and the Plaintiff could not
proceed with an EGM to investigate the
alleged criminal breach of trust by the
Defendant due to the latter’s failure to
attend the EGM. (referred to Re Sticky
Fingers Restaurant Ltd [1992] BBC 754)
Cases utilising s150 CA
See Nyuk Fung & Ors v Pan Global
Equities Bhd [1991] 1 CLJ 452 – “the Court
has no power to rectify anything which has
yet to occur, or to validate any act which is
not yet in breach of the Companies Act”
 Kemunting Tin Dredging (M) Bhd & Ors v
Baharuddin Ma’arof & Ors [1985] 1 CLJ
442 - The court refused to intervene since
the applicant can call for a general meeting
under s143(3) and s145(1)CA.

Preliminaries of Meetings
Power to convene meeting.
 Period of Notice to be sent out.
 People to whom notice is to be given.
 Place and time of meeting.
 Purpose of Meeting-Agenda.
 Proxies and Poll

Power to Convene Meeting
Board of Directors
 Any Director may convene an EGM (Table
A, article 44)
 Two or more members holding not less than
10% of the issued share capital of the co.
 members holding not less than 10% of the
paid-up voting share capital of the co may
call for an EGM.

Requisition for a Meeting
(s 144, CA)
Requisition shall state the objects of the
meeting and shall be signed by the
requisitionists and deposited at the
registered office of the company. The
requisition need not be under corporation’s
seal
 Roxy Electric Industries (Malaysia) Bhd v
Syarikat Nominee Bumiputra Sdn Bhd
[1989] 3 MLJ 231.

Requisition for a Meeting
(s 144, CA)
Upon receipt of requisition the director
must convene an extraordinary general
meeting not later than two months.
 If the directors do not convene a meeting
within 21 days, the requisitionists may do
so themselves (s 144(3)) within 3 months.

Requisition for a Meeting
(s 144, CA)

Any reasonable expenses incurred by the
requisitionists in calling the meeting are to
be paid by the company, which may
reimburse itself out of any sums due to the
defaulting directors by way of fees or other
remuneration: sub-s (4).
Case Law
HLB Nominees (Tempatan) Sdn Bhd v SJA
Bhd & Anor [2005] 1 CLJ 23 – the word
“shall not be held after the expiry of 3
months from that date” in s 144(3) CA 1965
are mandatory and incapable of being
enlarged
 SJA Bhd & Anor v HLB Nominees
(Tempatan) Sdn Bhd [2002] 7 CLJ 580 –
the word “from that date” is taken to mean
the date of the deposit of the requisition.

Cases Utilizing s144 CA
Removal of directors;
 Removal and proposed nomination of
auditors (Eksons Corp Bhd http://announcements.bursamalaysia.com/li
nkwebmainpage.nsf/lca.htm)
 Convene EGM for purpose of considering if
thought fit passing with or without
modification resolution to exempt
obligation to undertake any mandatory
offers that could arise (Magnum Corpn
Bhd)

Eg of a notice under s 144
NOTICE OF EXTRAORDINARY GENERAL MEETING
NOTICE IS HEREBY GIVEN THAT an
Extraordinary General Meeting of the Company
will be held pursuant to Section 144 of the
Companies Act, 1965 at [location] on [date] at
[time] for the purpose of considering and if
thought fit to pass the following ordinary
resolutions:-
Call for meetings (s 145, CA)
Meetings called by shareholders as provided
by the articles where it may provide that the
directors have power to convene
extraordinary general meetings.
 The section gives members holding of at
least 10% of the voting rights in the
company, the power to convene a meeting
themselves.

Call for Meetings (s 145, CA)
Differs from s 144 in that the directors are
not involved in this section.
 At least 14 days’ notice must be given of
meetings other than a meeting to pass a
special resolution.

Eg of a notice under s 145

"We, HLB Nominees (Tempatan ) Sdn Bhd
(Company No.47697-U) and Mr. Cheong Heng
Choy (NRIC No.571002-10-5287), holders of not
less than one-tenth of the paid-up share capital of
SJA Berhad ("Company") intend to convene an
extraordinary general meeting of SJA Berhad
("Meeting") pursuant to Section 145 of the
Companies Act 1965 on 2 July 2003. The objects
of the Meeting are as follows:To Appoint with Immediate Effect by way of
Ordinary Resolution the Following Persons as
Directors of the Company:-
Period of Notice
Determined by Statute for Companies
Meeting.
 Annual General Meeting S143(1) CA
 Not more than 15 months from last meeting
 All general meetings other than AGM shall
be called Extraordinary General Meeting
(EGM)

Period of Notice
14 days notice for AGM and EGM where
ordinary resolutions need to be passed.
 21 days notice for AGM and EGM where
special resolutions need to be passed.
 28 days notice for AGM and EGM where
ordinary resolutions requiring special notice
need to be passed.

Service of Notice
Service is on every member who has a right
to attend and vote at meeting.
 Deeming clause service of notice. Table A,
Article 108; Abdul Aziz Mohamad J in TA
Securities Bhd v Ng Yen Ling [2001] 1 CLJ
102
 ‘..service of notice shall be deemed to be
effected by….posting the letter containing
the notice…’
 Place of service-last known address.

Contents of Notice
Name and co number of Company.
 Type of Meeting.
 Date, day and time of Meeting.
 Place of Meeting.
 The business of the meeting as set out in the
agenda.
 Date of the Notice.
 Signature and name of Convenor
 Notes to the Notice on Proxy.

Case Law
 Hup
Seng Co Ltd v Chin Yin [1962]
MLJ 371 – If a material fact is not
disclosed in the Notice, any resolution
passed may be invalidated by a
member. The Notice in this case did
not spell out the draft resolutions to be
proposed at the extraordinary general
meeting.
Place of Meeting
The CA states that it should be held in the
state where the registered office is situated
S145A CA.
 However, meeting is not null and void if not
so held.
 But company will be liable to a fine.

People Present - Quorum
Quorum is defined as the minimum number
of members who must be present at a
meeting before business can be legally
transacted.
 Article 47, Table A-Two members present in
person shall be a quorum for a general
meeting. Member includes a person
attending as a proxy.
 S.147(1) CA Two members shall constitute
quorum.

Quorum for Directors Meeting
Article 83, Table A - The quorum necessary
for the transaction of the business of the
directors may be fixed by the directors, and
unless so fixed shall be two.
 However under new Bursa Malaysia Listing
Requirement, a Director who is absent for
more than 50% of the Meetings will be
disqualified as a Director.

Voting Methods
By show of hands - each person at the
meeting has one vote. Table A, art. 51
provides that at any general meeting a
resolution put to vote shall be decided by
show of hands in the first instance, unless a
poll is demanded (before or on the
declaration of the result of the show of
hands).
 By Poll
 By Voices, by ballot, by division and by
acclamation

Voting Methods (Cont)

It is interesting to note of a recent case
reported in The Star, Business, Friday,
April 1, 2005 where a minority shareholder
questioned the resolution on a voluntary
general offer (VGO) passed by a show of
hands instead of a poll at the EGM. As a
result of that, the acquiree company, Golden
Hope Plantations Bhd filed an application in
the Kuala Lumpur High Court seeking legal
interpretation of the Company’s article of
association.
Voting Methods (Cont)
Poll
Article 51 The following can call for a poll:
 Chairman
 At least 3 members present
 Any member/s representing not less than
one-tenth of the total voting rights

Proxies
Section 149 Co Act
 If a proxy is not a member of the company
then the proxy has to be An advocate &
solicitor or an approved co auditor
 A member shall not be entitled to appoint
more than 2 proxies to attend and vote at the
same meeting

Revocation of Proxies
Death/ insanity of the appointor
 Attendance of the appointor at the meeting
 Proxy revoked
 Appointment of new proxy
 Transfer of shares by appointor
 Verbal notice to the Chairman of the
meeting

Relationship between Appointor and
Proxy
Proxy acts as an agent
 Chairman may be appointed as proxy by the
shareholders
 Second Consolidated Trust v Ceylon
Amalgamated Estates [1943] 2 All ER 567 Chairman is the professional adviser of the
appointor and owes a fiduciary duty to the
shareholders to cast vote as stated

Case Law

Lim Hean Pin v Thean Seng Co. Sdn Bhd & Ors
[1992] 2 CLJ 828 – “By s149 CA 1965, the
plaintiff was entitled to appoint a solicitor
as a proxy and hence Article 51 of the
articles of association was void and
ineffective as it seeks to contract out of the
said Act”

Low Son Siang v. Lee Kim Yong [1999] 1 CLJ 529
- “A proxy paper signed in blank and
handed over to a person in authority who
then fills up the blank is effective if the
blank has been properly filled up when the
proxy paper is deposited or used.”
Postponement of Meeting
Postponement means that the
commencement of a meeting is itself
deferred.
 Adjournment of a meeting means the
suspension of the entire proceeding and
assumes that the proceeding has once
commenced.

Adjournment of Meeting
where a quorum is not present
 where accounts are not ready for AGM
 Chairman to obtain consent of the
meeting
 Chairman may at his own accord adjourn
the meeting if it is necessary to maintain
order

Adjournment of Meeting (Cont)
Cepatwawasan Group Bhd v Datuk Lo Fui
Ming & Ors; Ho Hee Chung (Intervening
Respondent) [2004] 4 CLJ 453 - “A chairman’s
inherent power to adjourn a meeting is only available to be
exercised when it proves " impossible " to put into operation
whatever provisions for adjournment there are in the rules. If
it is possible to obtain a resolution to adjourn, the chairman
does not have the power to adjourn, and if he adjourns
without a resolution the adjournment is wrong even if done in
good faith”.
Postponement of Meeting
 Where
Meeting is not properly
convened (no quorum/ no proper
Notice given/ members who are
entitled to attend are excluded/ there’s
no chairman) – Kang Shew Meng in
Directors’ & Shareholders’ Guide on
AGM.
When Quorum is not present

Article 48 Table A CA “…if within half an
hour from the time appointed for the
meeting…it shall stand adjourned to the
same day in the next week at the same time
and place or to such other day at such other
time and place as the directors may
determine.”
Legal Profession Act 1976,
s 67(2)

The recent 59th AGM of the Malaysian Bar on
19/3/2005 was allegedly held to be unlawful as it
did not meet the quorum required of 2,280 i.e.
one-fifth of the Bar’s 11,700 membership. Former
president Datuk Param Cumaraswamy and a few
other members walked out of the meeting when
the current president decided to go ahead with the
meeting. “The proper thing to do is to go to court
and get a declaration on this interpretation rather
than risk holding an AGM without a quorum” as
stated by the former president
Power of Court to Cure
Irregularities in Proceedings
s 355 CA 1965
Substantial injustice must not have been
caused
 Covers defect, irregularity or deficiency of
notice or time

Power of Chairman
The Chairman has the duty to
 preserve order
 ensure that meeting is properly convened
and conducted-notice of meeting and
quorum
 ascertaining the sense of the meetingputting relevant question to vote, causing a
poll to be taken when duly demanded and
declaring result of poll.

Power of the Chairman
Confining discussion within the scope of
the meeting and reasonable time
 Deciding point of order and incidental
questions raised at the meeting
 Putting relevant question to the meeting and
taking a vote thereon
 Normally chairman has a casting vote
 Declaring meeting closed when its business
is completed.

Malaysian Code of Corporate
Governance on AGM
The Chairman should :
 provide reasonable time for discussion at
the meeting.
 Not attempt to limit discussion of genuine
questions.
 Undertake to provide the questioner with a
written answer to any significant question
that cannot be answered on the spot.

Corporate Governance and the
Chairman
Chairman’s role in sifting the genuine
questions from the vexatious ones is crucial.
 There should be a clearly accepted division
of responsibilities at the head of the
company. Where the roles of a chairman
and chief executive officer are combined
there should be a strong independent
element on the board & it should be
publicly explained

Summary of Discussion at AGM
Companies should provide Shareholders
upon request, with a summary of the
discussion at the AGM.
 Companies should prepare a resume of
discussion to be sent to shareholders upon
request as a matter of best practice.

Motion
It is a proposal put forward at a meeting for
discussion before it is duly passed.
 It is moved by a ‘proposer’ and generally a
‘seconder’ is required.
 It should be in definite terms and free from
ambiguity.

Resolution
It is a motion that has been accepted or
voted and agreed by the necessary majority.
 An ordinary resolution is passed by a simple
majority.
 A special resolution is passed by not less
than three-fourths of such members as being
entitled to vote.

Types of Resolutions
 Ordinary
Resolution
 Special Resolution
 Resolution requiring special notice (eg.
Removal of auditor from office,
removal of director before the
expiration of his term)
Registration of Resolution

s154(1) CA 1965 - Every special
resolution and every resolution which
binds any class of shareholders whether
agreed to by all the members of that class
or not shall be lodged with the Registrar
within 1 month after the passing or
making thereof, except otherwise
expressly provided by this Act.
Practical Pointers
Calling Meeting to Order.
 Welcome those present.
 Encouraging participation.
 Adoption of Agenda.
 Approval of minutes.
 Order of the Day.
 Question/Point of Privilege.

Practical Pointers
Point of Information.
 Point of Order.
 Lay on the Table.
 Take from the Table.
 Appeal from Chairman’s decision

Point of Information
It is a question not an answer
 you request the information by asking a
point of information
 red cards are used for points of information

Point of Order
used to call a violation to the rules to the
attention of the chair and the conference
 If a particular kind of motion is not
debatable, it's appropriate to use a point of
order if the conference is in fact debating
such a motion

Lay on the Table
Removes the question from the assembly's
consideration temporarily in order to take
up something else of immediate urgency
 A motion laid on the table can be
considered again by the use of the motion
Take from the Table

Take from the Table
When taken up, the question with
everything adhering to it is before the
assembly exactly as when it was laid on the
table
 If the question is taken up on the day it was
laid on the table, members who have
exhausted their right of debate cannot again
speak on the question

Appeal from Chairman Decision
Once a chairman made a ruling in good
faith and no dissent from that ruling in the
meeting, it cannot subsequently be
challenged – Corpique (No.20) Pty Ltd &
Ors v Eastcount Ltd & Ors (1989) 7 AUC
794
 The Chairman must show impartiality, i.e.
not to deny the rights of members to vote, to
act in good faith, not to act out of personal
interest and not to make arbitrary decision

Appeal from Chairman Decision

Wishart v Henneberry (1962) 3 FLR 171,
per Joske J “If a public meeting is
dissatisfied with a chairman’s rulings, the
situation can be overcome by the meeting
passing a resolution that some other person,
who is mentioned by name in the resolution,
take the chair.”
Robert’s Rules of Order
A set of Parliamentary rules for conduct at
meetings
 Allows everyone to be heard and to make
decisions without confusion

Robert’s Rules of Order

These rules are, in effect, default rules;
that is to say, they govern only if there
are no contrary provision in any federal,
state or other law applicable to the
society or in the society’s bylaws or in
any special rules of order that the
society may have adopted.
Robert’s Rules of Order
The whole set of rules is set out in the
website at:
www.constitution.org/rror/rror--00.htm

Principles of Parliamentary
Procedure
Only one subject may claim the attention of
the assembly at one time.
 Each proposition presented for
consideration is entitled to a full and free
debate.
 Every member has rights equal to every
other member.

Principles of Parliamentary
Procedure
The will of the majority must be carried out,
and the rights of the minority must be
preserved.
 Though the majority may have their way,
the minority must be given their say.

Adoption of Robert’s Rules


By a majority vote through a motion
(Robert’s Rules of Order Newly Revised,
RONR, p.529)
If the company has bylaws already
(instead of amending it) may adopt a
parliamentary authority through a
resolution i.e. by a 2/3 vote (with Notice)
or vote of majority of entire membership
(without Notice) – RONR, p15, 1. 25-27;
p17, 1. 28-31
FAQ go to:http://www.robertsrules.com/faq.
html
The End