I beg to move amendmentNo. 342, in clause 310, page 138, line 19, leave out subsection (3).
Subsection (2) sets out the appropriate time periods to appoint a proxy. In normal circumstances, that is 48 hours before the meeting or the adjourned meeting is held. The purpose of the amendment is to clarify subsection (3), which states:
“In calculating the periods mentioned in subsection (2) no account shall be taken of any part of a day that is not a working day.”
My concern is that that may lead to confusion. The practice at present is that 48 hours means what it says. Therefore, if a shareholders’ meeting were to take place at 10 o’clock on a Monday morning, the proxy form would have to be back by 10 o’clock on the Saturday morning—in other words, 48 hours before the meeting. The registrars of plcs are geared up to receive notifications of such matters at the weekend, and although it may not be the most convenient time, it is practical and it can be achieved.
From my reading of clause 310(3), it appears that no account should be taken of any part of a day that is not a working day. Therefore, to take my example of a general meeting at 10 o’clock on a Monday morning, that seems to suggest that the 10 hours before the meeting on Monday morning could be taken into account, but not the hours of Saturday and Sunday, so the remaining 38 hours would have to be calculated counting back from 23.59 on the Friday night.
I wonder whether that is the intention behind the provision as drafted, because it adds complexity to companies’ assessments of the time allowed for the receipt of a notification of a proxy. Indeed, it may also limit the amount of time that a shareholder may legitimately have to arrange for a proxy to be appointed.
The issue becomes even more relevant in the context of our debate on time periods for general meetings. Most general meetings, other than annual general meetings, are held on 14 days’ notice. The time available in which to appoint a proxy is therefore quite tight because the proposal limits even further the time that a shareholder has to identify an appropriate proxy who can attend the meeting on their behalf and to complete and return the appropriate document.
My concern is that the provision appears to change current practice and has the potential to disadvantage shareholders of a company as it affects their ability to get an appropriate appointment notification to the company within the time allowed. I would appreciate clarification as the proposal seems to add complexity.
The purpose and intent of the clause are to do entirely the opposite. The clause is meant to simplify matters. It reflects an implementation of recommendations from the shareholder voting working group, which was conciliated by Paul Myners. We introduced the measure on his recommendation.
The working group’s concern was to alleviate companies and their registrars of the unnecessary burden of having to receive and process proxy appointments over a weekend. The hon. Gentleman understands that under current law, a company must take receipt of a proxy appointment up to, for example, 11 am on a Saturday and process it in time for a general meeting held at 11 am on the Monday. I understand that he wants to protect investors by ensuring that they can appoint their proxies as close as practicable to the time of the general meeting, but we believe that it is not unreasonable, given the working group’s recommendations, to require that proxy appointments are made on working days.
I point out again that the recommendation had the support of the wide group of interests represented in the working group, including investors, brokers, custodians, registrars and companies. Therefore, we believe that this is a sensible measure to decrease the burdens on business.
I am grateful for the Minister’s response. In my comments, I recognised that companies, in conjunction with their registrars, would have to bear some administrative burdens to be able to process proxies received at the weekend. Therefore, I understand the sense of the proposal and why it is being advocated. There is always a question of balancing ease of administration for the company with the rights of the shareholders. I again wave my flag for the rights of shareholders. I am delighted to stand up for them.
However, it is clear from what the Minister said that consideration has been given to how to strike the balance and whether the proposal goes too far in one direction. I am gratified that she said that the problem had been examined, considered and consulted on with a wide group of stakeholders. Therefore, in determining whether the proposal is appropriate and in taking account of potentially conflicting interests, I appreciate her clarification. We have also clarified the workings of the clause. In the light of her comments, I beg to ask leave to withdraw the amendment.