New SEC Guidelines Enhance Good Governance and Transparency of Listed Company Shareholder Meetings
In brief: The Office of the SEC has issued guidelines to improve the governance, transparency, and efficiency of listed company shareholder meetings while promoting shareholder participation. The guidelines recommend holding on-site or hybrid meetings, with procedures for online meetings to ensure shareholders’ rights are upheld. Standardized e-meeting systems with proper communication methods are encouraged, including registration, verification, and Q&A sessions.
In more detail:
Methods and Procedures
The guidelines propose that listed companies consider holding on-site shareholder meetings or combined on-site and online (hybrid) meetings. For online meetings, procedures should be in place to allow attending shareholders to participate and exercise their rights according to relevant laws, regulations, and the company’s articles of association. Standardized e-meeting systems with proper communication methods and administrative procedures should be adopted, including registration, verification, and Q&A sessions.
Presentation of Agenda Items
To ensure shareholders receive sufficient information for consideration and voting, the guidelines require listed companies to allocate appropriate presentation time and Q&A sessions for each agenda item. In the case of major or related party transactions, the board of directors or executives should present background information, material conditions, analysis of pros and cons, and the transaction’s effects on the company and shareholders. The scope of delegation of authority must also be explicitly set out.
Inquiries and Q&A Sessions
Listed companies must send an invitation to the shareholders’ meeting, including agenda items and attachments, within the period specified by law. The company should also disclose the documents on its website. Sufficient time should be allocated for shareholders’ inquiries and comments during each agenda item, with clear and complete answers provided by the company. In the case of online meetings, all shareholders should be informed of the questions asked and the company’s responses. All Q&As must be disclosed to the public as required by the Stock Exchange of Thailand’s disclosure rules and on the company’s website. Meeting minutes must be accurate, complete, clear, and disclosed to investors and the public.
Call for Action
As the season for annual general meetings approaches, listed companies can expect increased scrutiny regarding the manner in which shareholder meetings are conducted. It is important for companies to take note of and comply with the newly issued guidelines to support good governance and encourage shareholder participation.
For further information or inquiries, please contact the SEC.
Analyst comment
Positive news: The new SEC guidelines enhance good governance and transparency of listed company shareholder meetings.
Market impact: The market can expect increased scrutiny and compliance with the guidelines as companies aim to support good governance and encourage shareholder participation during annual general meetings. This should lead to improved transparency and efficiency in shareholder meetings.
