As previously reported, changes to the FRC’s UK Corporate Governance Code (the Code) in 2014 included a revision to the notice period for premium listed companies’ general meetings (excluding annual general meetings). The revision effectively extended the notice period required to be given of meetings, from 14 “clear” days to 14 “working” days. The alteration, unlike other amendments made to the Code at that time, was not consulted on. As a result there was some discussion when the revised Code was implemented as to whether the amendment had been made inadvertently.
ICSA has this week published its interpretation of the new Code requirement which it has “discussed with the FRC who are in agreement”. ICSA states that as a general rule it expects a company to give at least 14 working days’ notice, as set out in the Code, unless there is a “need for urgency”. ICSA notes that the FRC has indicated it is keeping this provision under review.
Impact – the revision extends the notice period required to be given by premium listed companies of general meetings. ICSA gives an example of a meeting scheduled for 7 August 2015. The Code requires notice to be given on 20 July, whereas the statutory provision governing notice periods of general meetings enables notice to be given a few days later on 23 July. Where a company does not comply with the requirement to give 14 working days’ notice, it will need to provide an explanation in the notice of the meeting and also in its next annual report.
Background – broadly, the statutory notice period for a premium listed public company’s general meeting is 14 clear days (provided certain criteria are met) unless it is an AGM when the notice period is 21 clear days (section 307A, Companies Act 2006). E.2.4. of the Code states that, “The company should arrange for the Notice of the AGM and related papers to be sent to shareholders at least 20 working days before the meeting. For other general meetings this should be at least 14 working days in advance.”