Title: Extraordinary General Meetings (EGMs) — What They Are, How They Work, and Practical Steps for Calling, Running, and Participating
Introduction
An Extraordinary General Meeting (EGM) is a shareholder meeting called to address urgent or specific matters that cannot wait until the company’s next Annual General Meeting (AGM). EGMs give companies and shareholders a mechanism to decide on pressing issues — for example, removing an officer, approving a major transaction, or resolving an unexpected legal or governance problem. Because EGMs interrupt the normal AGM cycle, they have special practical and procedural implications for organizers and participants.
Key takeaways
– An EGM is a special meeting convened outside the normal AGM schedule to address urgent or specific corporate matters.
– Who can call an EGM, how much notice is required, and what constitutes a valid resolution depends on the company’s governing documents (articles/bylaws) and applicable law.
– EGMs are commonly used in contested governance situations (removals/replacements), major corporate transactions, or to comply with court/tribunal orders.
– Careful compliance with notice, quorum, proxy and filing requirements is critical — failure may invalidate meeting decisions or trigger litigation or regulatory scrutiny.
Sources: Investopedia; London Stock Exchange Group; U.S. Securities and Exchange Commission (SEC). See source list at the end.
What is an EGM?
An EGM (also called a special meeting or special general meeting in some jurisdictions) is a shareholder meeting that is convened to consider and vote on one or more specific items of business that require shareholder approval before the next scheduled AGM can occur. EGMs are designed to be focused and timely; they typically deal with a limited set of resolutions or extraordinary issues.
Common reasons to call an EGM
– Removal or replacement of a director, chair, or senior executive.
– Ratification or approval of a major corporate transaction (e.g., sale of a business, large acquisition, change of control).
– Amendment of articles/bylaws or changes to share capital (e.g., new classes of shares, increases in authorized capital).
– Approval of emergency financing or bridge financing that requires shareholder consent.
– Responding to a court or regulatory order requiring shareholder action.
– Addressing shareholder requisitions or activist investor demands.
How EGMs operate and why they matter
Key operational elements
– Authority to call: Depending on company law and the company’s governing documents, EGMs can be called by the board, a specified percentage of shareholders (a requisition), or by a court or tribunal in certain circumstances.
– Notice and agenda: The meeting organizer must provide appropriate notice to shareholders that includes the time, place (or virtual access), and the precise resolutions to be considered. The required notice period and what must be included are set by law and the company’s articles/bylaws.
– Quorum: A minimum number of shareholders (or shares represented) must be present or represented to validly transact business. Quorum rules are set by the company’s governing documents and applicable law.
– Voting and proxies: Shareholder resolutions at an EGM are usually decided by a vote. Shareholders commonly vote in person, by proxy, or via electronic voting where permitted. Some resolutions require special majorities (e.g., 75%).
– Minutes and filings: The meeting minutes must be recorded, and any post-meeting statutory filings (with a registrar, stock exchange, or regulator) must be made promptly.
Why they matter
EGMs are crucial because they permit rapid decision-making on matters that could materially affect a company’s governance, financial position, or strategic direction. They also provide a formal forum for shareholder activism and accountability. Because of their urgent nature, EGMs are often high-stakes and may attract regulatory scrutiny, media attention, and litigation risk.
Practical steps for calling an EGM
(Separate checklists for boards, shareholder requisitionists, and tribunals/courts)
If you are a board member calling an EGM
1. Confirm authority: Review the company’s articles/bylaws and applicable law to ensure the board has authority to call an EGM and that the matter is proper for shareholder approval.
2. Determine the resolution wording: Draft clear, precise resolutions so shareholders know exactly what they are voting on.
3. Check notice requirements: Confirm statutory and article-based notice periods and content obligations. Plan the timetable (notice date, record date, meeting date).
4. Prepare supporting materials: Prepare explanatory notes, circulars, proxy forms, and any required regulatory disclosures or filings (e.g., proxy statements for publicly traded companies).
5. Choose the meeting format: Decide whether the EGM will be in-person, virtual, or hybrid — ensure compliance with articles and local law for virtual/hybrid meetings.
6. Serve notice: Send formal notice to all shareholders in the required manner (mail, electronic, platform) and publish any required announcements to exchanges or regulators.
7. Arrange logistics: Book a venue or virtual platform, organize registration, ensure voting systems and scrutineers are in place.
8. Hold the meeting and record minutes: Run the meeting per agenda, manage shareholder questions, call the vote, and record minutes and the results.
9. File post-meeting documents: File required returns, announcements, and director updates with regulators and exchanges promptly.
If you are a shareholder (requisitionist) seeking to call an EGM
1. Check statutory rights: Identify the statute and article thresholds for requisitioning a meeting (e.g., a percentage of voting rights needed).
2. Prepare the requisition: Follow the formal requisition format set out in the articles/legislation — include the proposed resolutions and supporting statements.
3. Deliver the requisition properly: Serve the requisition on the company in the prescribed manner and retain proof of service.
4. If the company refuses: Many regimes require the company to call the meeting after a valid requisition is received; if it refuses, legal remedies (petition to court or regulatory relief) may be available.
5. Mobilize support: Communicate with other shareholders to build support and coordinate proxy votes where permitted.
6. Prepare materials: Provide a clear explanatory circular or alternative management materials as permitted by law.
If a court or tribunal is involved
– Follow the court order or tribunal directions for convening and conducting the EGM, and ensure appointed persons comply with procedural requirements.
Practical steps for attending and participating in an EGM (for shareholders)
1. Check the notice and materials: Review the agenda, resolutions, explanatory notes, and proxy forms.
2. Verify eligibility and record date: Confirm you are a shareholder of record and whether there is a record date for voting.
3. Decide how to vote: Attend in person or appoint a proxy if you cannot attend. Follow the company’s proxy submission procedures and deadlines.
4. Prepare questions: If the meeting allows shareholder questions, prepare concise, relevant questions on the agenda items.
5. Coordinate with other shareholders: For contested EGMs (activist campaigns or removal votes), pooled coordination among supportive shareholders can be important — but observe securities laws and disclosure rules.
6. Follow up on outcomes: Review published meeting results, request minutes if needed, and monitor implementation of resolutions (e.g., changes in board composition or filings).
Differences between EGMs and AGMs
– Timing: AGMs are scheduled, usually annually, and required by law in many jurisdictions. EGMs are called as needed between AGMs.
– Purpose: AGMs cover regular annual business (financial statements, director elections, auditor appointments). EGMs focus on specific urgent business.
– Notice and flexibility: AGMs have established notice and disclosure schedules. EGMs require compliance with notice rules but are more flexible in timing and may be called at short notice under certain rules.
– Who can call: AGMs are normally called by the board as part of annual governance. EGMs can often be requisitioned by shareholders or called by a tribunal in addition to the board.
– Procedural differences: Some jurisdictions or company articles limit the types of business that can be considered at an EGM or require different voting majorities for certain EGM resolutions.
Case study — London Stock Exchange (December 2017)
Context: In late 2017, activist investor The Children’s Investment Fund Management (TCI) pushed for the removal of Donald Brydon as Chair of the London Stock Exchange Group (LSE) following controversy over the early departure of then-chief executive Xavier Rolet. TCI secured a substantial vote in favor of removal at a shareholder meeting and sought an extraordinary general meeting to press its case.
Outcome: The EGM was convened on a weekday in December 2017 (not a holiday). Despite receiving meaningful support for its motion, the result was that Donald Brydon remained in his position as chair. The episode illustrates how EGMs can be used by activist shareholders to seek governance change and how contested EGMs can result in intense media, shareholder, and regulatory focus. (Source: Investopedia summary and LSE general meeting result announcement.)
Risks and practical considerations
– Technical noncompliance: Incorrect notice, inadequate quorum, or defective proxy solicitation can invalidate resolutions and expose the company or organizers to litigation.
– Shareholder activism & reputational risk: EGMs called by activists can create public scrutiny and market volatility.
– Regulatory filings: Public companies must comply with securities rules (e.g., proxy statement filings in the U.S.) and exchange disclosure requirements.
– Timing and logistics: Short-notice meetings create operational burdens for both companies and shareholders; plan logistics, voting mechanisms, and investor communications carefully.
– Coordination limits: When coordinating with other shareholders, be mindful of insider trading, disclosure obligations, and anti-collusion rules under securities law.
checklist — what a valid EGM notice should typically include
– Date and time of the meeting.
– Location or virtual meeting access information.
– Clear statement that the meeting is an Extraordinary General Meeting.
– Full text of each resolution to be considered (and whether ordinary or special).
– Record date for shareholder eligibility to vote (if applicable).
– Proxy voting instructions and deadlines.
– Details on how shareholders can access meeting materials and submit questions (if permitted).
– Information on quorum requirements and how votes will be counted.
Sample resolution wording (high-level examples)
– Ordinary resolution to remove a director: “That Mr./Ms. [Name] be removed from the office of director with immediate effect.”
– Special resolution to amend articles: “That the articles of association of the company be amended as set out in the schedule to this notice.”
(Use counsel to prepare jurisdiction- and company-specific wording.)
Regulatory and disclosure considerations (public companies)
– In the U.S., public companies typically file proxy materials with the SEC (e.g., proxy statements for special meetings) and must follow the SEC’s proxy rules. See SEC guidance on proxy materials for special meetings. (Source: SEC.)
– Publicly listed companies often must make exchange announcements about EGMs, provide shareholder circulars, and file required post-meeting results.
Bottom line
An EGM is a powerful corporate governance tool that enables rapid shareholder decision-making on urgent or extraordinary issues. Because the procedural and legal requirements for EGMs vary by company documents and jurisdiction, thorough planning, strict compliance with notice/proxy/quorum rules, clear communication with shareholders, and legal counsel involvement are essential to avoid invalidation, litigation, or regulatory problems. Whether you are a board member, a shareholder seeking to requisition a meeting, or an investor preparing to participate, following the practical steps above will help ensure that an EGM achieves its intended purpose and withstands scrutiny.
Sources and further reading
– Investopedia. “Extraordinary General Meeting (EGM).” (Provided source material.)
– London Stock Exchange Group. “London Stock Exchange Group plc Result of General Meeting.” (LSE announcement related to December 2017 meeting.)
– U.S. Securities and Exchange Commission. “Proxy Statements: How to Find.” (Guidance on proxy materials and filings for public companies.)
Disclaimer
This article provides general information about EGMs and is not legal advice. Rules for calling and conducting EGMs vary by jurisdiction and company documents; consult corporate counsel for specific legal guidance.