This is a new section. The purpose is to meet the recommendation of the Committee in paragraph 130 and the following paragraphs of the report.
Is it a bit wide, allowing a shareholder to appoint anyone as proxy ? Would it be an advantage to confine it to solicitors, bankers or accountants ? A proxy in this case has every right to speak as well as to vote.
At present there are restrictions in the articles of association—or there usually are, anyway—providing that a shareholder cannot appoint as proxy a person other than a fellow shareholder. Sometimes it is impossible, or perhaps inconvenient, to appoint a fellow shareholder. The shareholder who is seeking a proxy may not be sure the fellow shareholder would hold the same views. The purpose of this is to ensure that the shareholder who cannot attend the meeting can appoint a proxy from as wide a pool as possible to ensure that that person will properly represent his views. I think it is only right he should not be restricted in his choice.
I think it is a good provision. There is one other matter in connection with it. I speak now from recollection and the Minister may check me if I am wrong. I think this developed as a result of certain decisions by which at meetings where proxies are permitted, it is required that only members of a particular class can be appointed proxy. If, for instance, it is a meeting of preference shareholders, a preference shareholder must be appointed as proxy. That can work quite a lot of difficulty sometimes. If I am right in my recollection of this, I think we should make it absolutely clear that anybody can be appointed a proxy, whether or not he is a member of the particular class of shareholders at whose meeting he is attending.
We would all think it is very desirable to have this wide enough that a stranger can go in and say the hard word, if necessary.
What I have in mind is that at present if a proxy is required, somebody must be appointed from the same class of shareholders at the meeting. In other words, if it is a meeting of 7½ per cent cumulative A preference shareholders, it must be a member of that class who is appointed. That is tying up the situation too much. It should be made as wide as possible.
It says here in subsection (7) :
This section shall apply to meetings of any class of members of a company as it applies to general meetings of the company.
Therefore, I take it that subsection means a shareholder in a particular class can go outside that particular class.
Are you not going outside the class of members anyway ? Therefore, that does not arise. Under subsection (4) it is still permissible to insist that the proxies are in 48 hours in advance ?
That deals with the identification problem ?
This section applies to private as well as public companies ?
I am wondering whether subsection (3) is practicable in the case of some private companies. I can imagine the notice for a meeting of some private companies being very informal. This imposes an obligation to incorporate in the notice the information contained in this section for the appointment of proxies.
There is a limit to the amount of informality you can have in notices of meetings. It has always been the practice in Britain, since the Cohen Committee recommended it, that this power of appointing outsiders as proxies is specifically brought to the attention of people receiving notice of the meeting, so that they do not have to go and root up any Acts of Parliament to see the point. It does not take up much room in notices, just a line or two.
If it is necessary in subsection (4) to render certain provisions in a company's articles void if they contravene the section, is it not similarly necessary that any provisions in the articles which are in conflict with the question of proxies generally should likewise be voided ?
Our feeling was that Section 136 overrides anything in the articles. The wording of subsection (4) is only a sort of drafting machinery. I think if it said nothing more than that less than 48 hours shall be required for that particular thing, it would be equally effective.
This matter of giving wider powers to proxies generally is something new. Somewhere in the Bill there is provision that a shareholder can use his votes differently if it comes to a poll.
That is later on.
Must a shareholder appoint only one proxy for himself or could he appoint a proxy for every share. Subsection (3) prompts me to ask that question.
Subsection (2) (b) says:
A member of a company shall not be entitled to appoint more than one proxy to attend on the same occasion.
What is the meaning of Subsection (3) ?
The articles may be more liberal. Subsection (2) provides : " Unless the articles otherwise provide—" The articles may provide for the appointment of more than one proxy to represent different shares.
A proxy must be able to vote different ways.
Quite. The only question is whether you could have a proxy for each of the ways.
As I understand it, we are now providing that proxies are to be permitted whether or not the articles permit it.
Is this something that has been done in England ?
Yes, for a considerable number of years it has been in the law in Britain and also in Northern Ireland, with certain variations.
Paragraph 131 of our Companies Report states :
We recommend that, notwithstanding anything in the Articles of Association of a company, a member entitled to attend and vote at a meeting of the company may appoint any person (whether a member of the company or not) as his proxy to attend and vote for him and that the proxy may speak at the meeting.
That is exactly what is there.
Is this 48 hours the same as the existing law ?
There is no overriding law. It is recommended in paragraph 132.