Governance

Appointment of Directors

A PLC must have at least two directors. The Company Act 2014 provisions in respect of sole directors do not apply to PLCs. A PLC may have one member. A PLC with more than one member must hold general meetings.

Unless the company’s constitution otherwise provides, the directors are to rotate. All directors retire at the first AGM under the default provisions. At each subsequent AGM, one-third or the number nearest to one-third shall retire. The longest serving directors must retire. Where equal numbers have served the same period, those who are to retire are determined by lot.

Retiring directors are eligible for re-election. The members at the meeting at which the director retires may fill the vacated office by election. In default of the members filling the office by election, the retiring officer, if offering himself for re-election, is deemed to be re-elected, unless the meeting resolves not to fill the vacated office, or a resolution for the re-election of the director has been put to the meeting and is lost.

Where there is a change in directors’ particulars and within the period required for registration in the CRO, the PLC issues a prospectus or makes a local offer of securities, the CRO notification must be made before the date of the prospectus or offer document.

In the absence of provisions to the contrary in the constitution, the remuneration of directors is to be determined, from time to time, by the PLC in general meeting. Directors may be paid expenses properly incurred by them, including travelling, hotel and other expenses in attending and returning from directors and general meetings of the PLC, and otherwise in connection with the business of the PLC.


Secretary

The directors of a PLC must ensure that the person appointed as secretary has the skills or resources necessary to discharge his or her statutory duty and other duties.  The person must comply with one of the following conditions.

  • he must be a person who for at least three of the five preceding years has held the position of secretary of a company;
  • the person must be a member of a body recognised for that purpose by the Minister;
  • he must be a person who by virtue of his holding or having held any other position or having been a member of another body, appears to the directors to be capable of discharging the duties of the office.

Notice of Members’ Meetings

A PLC may use the unanimous written resolution provision applicable to private companies, provided that its constitution does not prohibit it from so doing. A PLC may have one member, in which event a general meeting is not required, subject to conditions.

For the purpose of determining who is entitled to attend and vote at meetings of the company, certain categories of PLCs which issue publicly traded securities may specify a time not more than 48 hours before the meeting, by which persons must be entered in the relevant register of securities, in order to have the right to attend or vote at the meeting. Changes in the relevant register e.g. shareholders, debentures, etc. after that date may be disregarded.

A provision in the articles or another instrument (e.g. a debenture) may determine the persons entitled to notice as those interested in the relevant securities at the close of business on a day determined by the issuer, which may be no more than seven days before notice of the meeting is sent.

The minimum period of notice for an extraordinary general meeting at which special resolution is not proposed is 14 days for PLCs, rather than 7 days, which applies to private companies.


Quoted PLC Meetings

The following provisions apply to PLCs whose shares are admitted onto a regulated market, referred to as a traded PLC. This is in effect a stock exchange or other regulated market within the EU.

Holders of the same classes of shares must be treated equally. Holders of different classes of shares may be treated unequally in accordance with the relevant class rights.

The directors of a traded PLC must convene an extraordinary general meeting on foot of a requisition by the holders of 5% of the paid-up share capital. A general meeting of the traded PLC, whether an annual general meeting or extraordinary general meeting other than an adjourned meeting, shall be called by not less than 21 days.

In addition to the general requirements for corporate meetings,  notices of general meetings, whether an AGM or extraordinary general meeting, must be issued, free of charge in a manner ensuring fast access, on a non-discriminatory basis, using such media as may reasonably be relied upon, for the effective dissemination of information to the public through the EU.


Notice of Meeting I

The notice of a meeting of the members (and security holders) of a quoted PLC shall set out

  • when and where the meeting is to take place and the proposed agenda;
  • a clear and precise statement of any procedures a member must comply with, in order to participate and vote in the meeting; this is to include the following rights:  to put items on the agenda; to table draft resolutions; ask questions; attend, speak and vote;
  • procedure for appointing proxies;
  • the record date for eligibility for voting;
  • where and how the full, unabridged text of documents and draft resolutions may be obtained;
  • the website where the information referred to below is made available.

Notice of Meeting II

A traded PLC shall make available to its members on its website, for a continuous period beginning at least 21 days before the general meeting the following:

  • notice of the meeting;
  • the total number of shares and voting rights at the date of the giving the notice;
  • the documents to be submitted to the meeting;
  • the draft resolutions or, where no draft resolution is proposed to be adopted, a comment from the Board on each item of the proposed agenda;
  • a copy of forms to be used by the proxy voters.

A traded PLC shall make available on its website as soon as possible after their receipt, draft resolutions tabled by members. Where the proxy forms cannot be made available on the website for technical reasons, the PLC must indicate on the website how the forms may be obtained in hard form. They shall be sent by post, free of charge, to each member who requests them.


Adding Draft Resolution

Shareholders in traded PLCs have the right to add items to the agenda and table draft resolutions. An item may be added to the agenda or to a draft resolution tabled for consideration at an AGM or EGM by members holding at least 3% of the issued share capital which represent at least 3% of voting rights, subject to compliance with the following provisions.

Each draft resolution must be accompanied by a statement justifying its inclusion and setting out the draft resolution to be adopted. A request by a member to put an item on the agenda of a traded PLC must be made in writing or electronic form at least 42 days before the date of the meeting to which it relates.

Where the exercise of the rights involves a modification of the agenda after it has already been communicated to members, then the PLC shall make available a revised agenda in the same manner as the previous agenda in advance of the record date (the date defining entitlement to vote). If no such date exists, it must be made available sufficiently in advance of the meeting so as to enable other members to appoint a proxy or where applicable, vote by correspondence.

In order to facilitate the exercise of the above rights, a traded PLC shall ensure the date of the next general meeting is placed on its website at the end of the previous financial year, or 70 days prior to the AGM, whichever is earlier. The record date is to be not more than 48 hours before the general meeting. Persons entered on the relevant register of securities on the record date may exercise the relevant voting rights at the general meeting. Later changes are disregarded.


Participation

Members of a traded PLC have the right to ask questions relating to items on the agenda of a general meeting and have such questions answered by the PLC, subject to such reasonable requirements as may be made in relation to identification. An answer to a question is not required where

  • to give an answer would unduly interfere with the preparation for the meeting or the confidentiality or business interests of the PLC;
  • the answer is already given on the PLC’s website by in a Q&A forum; or
  • it appears to the chairperson of the meeting that it is undesirable in the interests of the good order of the meeting that the question be answered.

The right to participate and vote may not be subject to any requirement that the shares be deposited with, transferred, or registered in the name of another person before the general meeting. Unless the right is otherwise subject to such a restriction, a shareholder has the right to sell or otherwise transfer his shares in a traded PLC between the record date and the date of the general meeting to which it applies.

A traded PLC may require by way of proof of a person’s qualification as a member, only such requirements as are necessary to ensure the identification of the person as a member. The requirements must be proportionate to the achievement of that objective.


Electronic Participation

Traded PLCs may provide for participation in general meetings, electronically. This includes

  • mechanisms for casting votes, before or during the meeting, without being physically present;
  • real-time transmission of the meeting; and
  • real-time two-way communication enabling members to address the meeting from remote locations.

Electronic means may be used, subject to such restrictions and requirements as are necessary to ensure identification of those taking part and the security of the electronic communication, to the extent that such requirements and restrictions are proportionate to the achievement of those objectives. Members shall be informed of any requirements and restrictions in place.

Traded PLCs must ensure in so far as practicable, that such means guarantee the security of electronic communication; minimise the risk of data corruption and unauthorised access; and provide certainty as to the source of the electronic communications. Failure or disruption, this must be remedied as soon as possible.


Traded PLCs Proxies

The general provisions in relation to proxies apply to traded PLCs, with modifications. Unless the company’s constitution otherwise provides, a member of a company is not entitled to appoint more than one proxy to attend on the same occasion. No limitation may be placed on the right of a member to appoint more than one proxy on the same occasion in respect of shares held in different security accounts.

A member acting as an intermediary on behalf of one or more clients must not be prohibited from granting proxies to each of his or her clients or to any third party designated by the client. An intermediary is permitted to cast votes attaching to some of the shares differently from others.

Without limiting the member’s entitlements under general companies legislation, a member is entitled

  • to appoint a proxy by electronic means to an address specified by the traded PLC;
  • have electronic notification of such appointment accepted by the traded PLC; and
  • have at least one effective means of notification of a proxy by electronic means offered.

The appointment and notification of appointment of a proxy to a traded PLC and the issue of voting instructions to a proxy may be subject only to such formal requirements as are necessary to ensure identification of the member or the proxy or verifying the content of the voting instructions. The requirements apply only to the extent that they are proportionate to achieving those objectives.

Any provision in the constitution of a traded PLC other than a requirement that a person appointed as a proxy shall possess legal capacity, shall be void in so far as it would have the effect of restricting the eligibility of a person appointed as a proxy.


Voting on Resolution

A stock exchange PLC may permit, by appropriate arrangements, votes to be exercised for the purpose of a poll at a general meeting by correspondence in advance. They shall be made subject only to requirements and restrictions that are necessary to ensure identification and which are proportionate to that objective.

A traded PLC shall not be required to count votes cast in advance by correspondence unless the votes are received before the date and time specified by the PLC. The PLC may not specify a date and time that is more than 24 hours before the time at which the vote is concluded.

Where a member requests a full count of a vote before or on the declaration of a result at a general meeting, then in relation to each resolution proposed, a quoted PLC shall establish:

  • the number of shares for which votes have been validly cast;
  • the proportion of the company’s issued share capital at the close of business on the day before the meeting represented by those votes;
  • the total number of votes validly cast; and
  • the total number of votes cast in favour or against each resolution and, if counted, the number of abstentions.

Where no member requests a full count of the voting before or on the declaration of the result of a vote, it is sufficient for the PLC to establish the voting results only to the extent necessary to ensure that the required majority is reached for each resolution.A traded PLC shall ensure that a voting result established above is published on the website not later than the expiry of 15 days after the date of the meeting at which the voting result was obtained.


References and Sources

Primary References

Companies Act 2014 (Irish Statute Book)

Companies Act 2014: An Annotation (2015) Conroy

Law of Companies 4th Ed.  (2016)     Courtney

Keane on Company Law 5th Ed. (2016) Hutchinson

Other Irish Sources

Tables of Origins & Destinations Companies Act 2014 (2016) Bloomsbury

Introduction to Irish Company Law    4th Ed. (2015) Callanan

Bloomsbury’s Guide to the Companies Act 2015      Courtney & Ors

Company Law in Ireland 2nd Ed. (2015) Thuillier

Pre-2014 Legislation Editions

Modern Irish Company Law   2nd Ed. (2001) Ellis

Cases & Materials Company Law 2nd Ed. (1998) Forde

Company Law 4th Ed. (2008)  Forde & Kennedy

Corporations & Partnerships in Ireland (2010) Lynch-Fannon & Cuddihy

Companies Acts 1963-2012   (2012)  MacCann & Courtney

Constitutional Rights of Companies   (2007)  O’Neill

Court Applications Under the Companies Act (2013) Samad

Shorter Guides

Company Law – Nutshell 3rd Ed. (2013) McConville

Questions & Answers on Company Law (2008)        McGrath, N & Murphy

Make That Grade Irish Company Law 5th Ed. (2015) Murphy

Company Law BELR Series (2015)   O’Mahony

UK Sources

Companies Act 2006 (UK) (Legilsation.gov.uk)

Statute books Blackstone’s statutes on company law (OUP)

Gower Principles of Modern Company Law 10th Ed. (2016) P. and S. Worthington

Company Law in Context 2nd Ed. (2012) D Kershaw

Company Law (9th Ed.) OUP (2016) J Lowry and A Dignam

Cases and Materials in Company law 11th Ed (2016) Sealy and Worthington

 

UK Practitioners Services

Tolley’s Company Law Handbook

Gore-Browne on Companies

Palmer’s Company Law