On 19 November 2009 RiskMetrics Group (RMG), a US-based proxy voting service provider published its 2010 European Corporate Governance Policy Update (Update) which is effective for general meetings on or after 1 February 2010. This Update sets out RMG’s policy for matters dealt with at general meetings held by companies in Europe. The Update states that RMG’s voting policy in the UK is that of the National Association of Pension Funds (NAPF). The NAPF last issued their UK Voting Guidelines in February 2009.
RMG’s policy on holding general meetings at 14 days’ notice is of particular importance. In accordance with the Shareholder Rights Directive (SRD) and section 307A(4) Companies Act 2006, if a traded company (ie a company on the Official List but not AIM) wishes to hold a meeting (other than an annual general meeting) on 14 days’ notice it is required to pass an annual enabling resolution. On 3 November 2009 RMG published a proposed policy statement in which it recommended that shareholders oppose any resolution which reduces the notice period to less than 28 days. However, RMG’s appears to have softened its stance in its Update. Its Update provides that RMG will generally recommend voting in favour of such a resolution where the company discloses that the shorter period of between 20 and 14 days would not be used as a matter of routine for such meetings, but only when the flexibility is merited by the business of the meeting.