AGM problems and solutions

Some common scenarios and issues that can arise at an AGM.

No quorum to start the AGM

You cannot start the AGM if you don't have enough members present (quorum) within an hour of the start time that was in the notice of the meeting.

Read how to work out if a quorum is present

Solution

The CATSI Act provides an adjournment rule to cover situations where an AGM doesn't achieve quorum. The CATSI Act rule says, if your corporation does not reach quorum within one hour of the start time in the notice, the AGM is adjourned to the same place, day and time in the next week, unless the directors specify otherwise (by passing a resolution of the board deciding a different place, date or time). Adjourning the meeting is considered a continuation of the original meeting.

If no quorum is present at the resumed meeting within one hour after the time for the meeting, the meeting is dissolved.

If the AGM is dissolved, directors need to start the process again by calling the AGM again and giving notice to all members.

! Quorum and adjournment rules are replaceable, so check your rule book for these rules.

Losing quorum during the AGM

The quorum must be present at all times during the meeting for it to be validly constituted. 

If members leave the meeting and the number of members drops below quorum, the meeting is not able to continue. 

Solution

The chair of an AGM can call a short break (short adjournment) to try to get members back into the meeting to finish the business. If the members don't return, the meeting is dissolved. You will need to complete any unfinished business at the next general meeting.

The chairperson doesn't show up

There must be a person to chair the AGM.

The directors decide who will chair the corporation's general meetings. Some corporation boards elect a chairperson as an ongoing position within their board, and as part of that role they are elected to chair the AGM. Some corporations elect an individual to chair each AGM.

There can be times when the chairperson is not available or declines to chair the meeting (or part of the meeting). 

Solution

The directors at the AGM must first check the corporation's rule book for the process for electing a new chair for the meeting. If there are no rules about this situation then:

  • The directors at the AGM must elect an individual present to chair the meeting (or part of it).
  • If the directors don't elect a chair, then the members at the AGM must elect a member present to chair the meeting (or part of it).

! Chairing the AGM is a replaceable rule, so check your corporation's rule book for your process for electing someone to chair the meeting.

Poor behaviour and grievances

The chair of a meeting must allow a reasonable opportunity for members as a whole to ask questions or make comments about the corporation's performance or services. However, sometimes there may be:

  • questions or comments that are repetitive, rude or offensive
  • dissatisfied or disgruntled members using the AGM as a platform to raise concerns about specific issues involving the corporation.

Solution

The chair can (and should) enforce behaviour of meeting attendees that is controlled, calm and polite.

Proactive engagement with disgruntled members – where appropriate – can help minimise potential disruptions during the AGM. Often, misunderstandings or incomplete information fuel these concerns, leading to unnecessary tension. Nevertheless, a diversity of perspectives within your boardroom and membership is healthy and can contribute to stronger governance.

Disruption and disorderly conduct

One of the chair's main responsibilities is to keep the meeting running smoothly. This said, sometimes AGMs can get out of control.

Solution

The chair keeps the meeting orderly by:

  • Sticking to the meeting agenda.
  • Giving everyone who’s allowed to speak a fair chance to share their views including opposing views. If the majority of members agree, the chair can end discussion on a topic after a reasonable amount of time.
  • Asking a member to sit down if they’re taking too long with their questions.
  • Calling the meeting to order if things get out of hand. 

The chair of a meeting should be comfortable ejecting members who:

  • pose a threat to the orderly running of a meeting or
  • interfere with the ability of all members to safely participate in the AGM, including asking questions and voting without the fear of intimidation.

If the disruption continues, the chair should check what the corporation's rules say and seek to secure a majority vote by members present on a motion to adjourn the meeting. If this is not possible in the circumstances, the chair has the power to adjourn the meeting immediately.

Special resolutions not included in the meeting notice

Certain decisions, such as changing the corporation's rule book, require a type of decision called a 'special resolution' because they are major decisions reserved for members. If you've forgotten to include notice of a special resolution including the exact words of the resolution in the notice for the AGM don't bother wasting time voting on it at the meeting. It will not pass as a special resolution because you didn't follow the required process.

Solution

Hold the decision for the next general meeting. When you call that meeting make sure you follow the steps required for a special resolution.

Newly appointed director doesn't have a director ID

Every person appointed as a director must apply for a director ID and tell their corporation what it is. The corporation then has to tell ORIC. 

Some corporations have included in their rule book that having a director ID is a requirement for eligibility to be appointed as a director. 

Solution

For corporations that have not included director ID in their director eligibility rule: If a person who does not yet have a director ID agrees to become a director on the day of the AGM, have them apply for one as soon as possible after the meeting. 

Within 28 days of the AGM: the individual has to apply to the Australian Business Registry Service (ABRS) for their director ID; give the number to the corporation; and the corporation has to notify ORIC of the director's appointment and their personal details.

For corporations that have director ID in their director eligibility rule: If a person does not have a director ID, they do not meet the corporation's director eligibility rules. In the lead up to the AGM, encourage all nominees to apply for a director ID from the ABRS – anyone can apply for one if they are thinking about becoming a director.

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