Clause 307

Company Law Reform Bill [Lords] – in a Public Bill Committee at 2:00 pm on 29th June 2006.

Alert me about debates like this

Rights to appoint proxies

Question proposed, That the clause stand part of the Bill.

Photo of James Brokenshire James Brokenshire Conservative, Hornchurch

I seek a couple of points of clarification. The first is on a matter which we touched on earlier, but I am not sure whether I couched it in the form of a question. Will it be possible for a company member to attend a general meeting and appoint a proxy at the same time by splitting his entitlement to allow the proxy to use some of his shares? If so, a member could bring along his professional advisory team by appointing them as proxies, which would give them speaking rights and so on at the meeting. That is not currently the case.

The other issue, to which I am sure we will come back when we debate nominee shareholders, is the number of proxies that can be appointed in relation to one shareholding. I assume that if someone holds 100 shares, he should technically be able to appoint as many proxies as he likes based on the reference in clause 307(2) to the number of shares or £10 multiples of stock held. There is therefore the potential for a large number of proxies to be appointed under one shareholding. That may be appropriate in the context of the debate that we will have on nominee shareholders and their rights, but it could be subject to abuse. Does the Minister have any thoughts on that?

Photo of Margaret Hodge Margaret Hodge Minister of State (Industry and the Regions)

I look forward to our discussions on nominee shareholders. As I told Conservative members of the Committee outside the Room, we are trying to resolve the matter with all parties concerned so that we can suggest a way of operating that commands broad consensus from those involved. We are close to doing so.

There is nothing to stop a member appointing a proxy and attending a meeting himself. If there were a vote, the member’s vote would override that of the proxy. I hope that that covers the hon. Gentleman’s concern. I believe that he also tabled an amendment that was not selected.

Photo of James Brokenshire James Brokenshire Conservative, Hornchurch

It dealt with a separate issue: the ability of members to split their holding, not to vote, but to give their professional advisers speaking rights. From what the Minister said, I think that it would be possible for a member to split his entitlement to appoint a proxy and entitle him to attend to speak but not to vote.

Photo of Margaret Hodge Margaret Hodge Minister of State (Industry and the Regions)

That is correct. On the other issue, which we will have to discuss further, under the current law an activist could buy 100 shares in the names of 100 different people to enable him to attend an AGM. If he were intent on disrupting a meeting, he could do so, but he might find an easier way without having to buy 100 shares and appoint proxies. I am not sure about appointing proxies, but in those circumstances, as in the House or wherever similar meetings are held, it is up to the chairman to take a view on how to control any disruption, whether it is caused by members, by proxies or by anyone else.

Question put and agreed to.

Clause 307 ordered to stand part of the Bill.

Clauses 308 and 309 ordered to stand part of the Bill.