how an annual general meeting agm works
an annual general meeting or annual shareholder meeting is primarily held to allow shareholders to vote on both company issues and the selection of the company s board of directors in large companies this meeting is typically the only time during the year when shareholders and executives interact 1the exact rules governing an agm vary according to jurisdiction as outlined by many states in their laws of incorporation both public and private companies must hold agms though the rules tend to be more stringent for publicly traded companies 3if a company needs to resolve a problem between annual general meetings it may call an extraordinary general meeting public companies must file annual proxy statements known as form def 14a with the securities and exchange commission sec the filing will specify the date time and location of the annual meeting as well as executive compensation and any material matters of the company concerning shareholder voting and nominated directors 4annual general meetings agms are important for the transparency they provide the ability to include shareholders as well as bringing management to accountability qualifications for an annual general meeting agm the corporate bylaws that govern a company along with its jurisdiction memorandum and articles of association contain the rules governing an agm for example there are provisions detailing how far in advance shareholders must be notified of where and when an agm will be held and how to vote by proxy in most jurisdictions the following items by law must be discussed at an agm additional topics covered at an annual general meeting agm if the company has not been performing well the agm is also when shareholders can question the board of directors and management as to why performance has been poor the shareholders can demand satisfactory answers as well as inquire about the strategies that management plans to implement to turn the company around the agm is also when shareholders can vote on company matters other than electing the board of directors for example if management is contemplating a merger or an acquisition the proposal can be presented to the shareholders and they can vote on whether or not the company should proceed 4several other elements may be added to an agm agenda often the company s directors and executives use an agm as their opportunity to share their vision of the company s future with the shareholders for example at the agm for berkshire hathaway warren buffett delivers long speeches on his views of the company and the economy as a whole 5berkshire hathaway s annual gathering has become so popular that it is attended by tens of thousands of people each year and it s been dubbed the woodstock for capitalists 