What is an 'Annual General Meeting - AGM'

An annual general meeting (AGM) is a mandatory yearly gathering of a company's interested shareholders. At the AGM, the directors of the company present an annual report, which contains information for shareholders about its performance and strategy. Shareholders with voting rights vote on current issues, such as appointments to the company's board of directors, executive compensation, dividend payments and selection of auditors.

BREAKING DOWN 'Annual General Meeting - AGM'

Shareholders who do not attend the meeting in person may usually vote by proxy, which can be done online or by mail.

The exact rules governing the AGM vary from jurisdiction to jurisdiction. As a rule, both public and private companies must hold AGMs, although the rules tend to be more stringent for publicly traded companies.

The holding of an AGM is the principal right of the company's shareholders. In large companies, it is typically the only time during the year when shareholders and executives interact. If a company needs to resolve a problem between annual general meetings, it may call an extraordinary general meeting.

Mandatory Agenda

The corporate laws that govern the company, along with its memorandum and articles of association, contain the rules governing the AGM. For example, there are provisions detailing how far in advance shareholders must be notified of where and when the AGM will be held and how to vote by proxy.

In most jurisdictions, the following items, by law, must be discussed at the AGM:

• Minutes of previous meeting: The minutes of the previous year's AGM must be presented and approved.

• Financial statements: The company presents its annual financial statements to its shareholders for approval.

• Ratification of director's actions: The shareholders approve and ratify (or not) the decisions made by the board of directors over the previous year. This often includes the payment of a dividend.

• Election of the board of directors: The shareholders elect the board of directors for the upcoming year.

Additional Elements

Several other elements may be added to the agenda. Often, the company's directors and executives use the 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. This has become so popular that it is attended by tens of thousands of people annually, and it has been dubbed as Woodstock for Capitalists.

There is often a time set aside for shareholders to ask questions to the directors of the company. Activist shareholders may use AGMs as an opportunity to express their concerns.

  1. Final Dividend

    The final dividend declared at a company's Annual General Meeting ...
  2. Shareholder

    Any person, company or other institution that owns at least one ...
  3. Proxy

    1. An agent legally authorized to act on behalf of another party. ...
  4. Proxy Statement

    A document containing the information that a company is required ...
  5. Shareholders' Agreement

    A shareholders' agreement is an arrangement among a company's ...
  6. Corporate Governance

    Corporate governance is the system of rules, practices and processes ...
Related Articles
  1. Investing

    A Peek Into Shareholder Meetings

    Shareholder meetings can be glamorous, exciting or controversial, but not particularly revelatory.
  2. Managing Wealth

    An Introduction To Shareholder Activism

    The secret to being an activist shareholder is to ask the right questions.
  3. Investing

    Proxy Season 2016: Most Wonderful Time of the Year

    Each year, public companies hold shareholder meetings where individual and institutional investors vote on the future. Here is what to watch in 2016.
  4. Managing Wealth

    Know Your Shareholder Rights

    Common stock owners have numerous privileges and should be vigilant in monitoring a company.
  5. Investing

    The Basics of Corporate Structure

    CEOs, CFOs, presidents and vice presidents – learn how to tell the difference.
  6. Investing

    How Your Vote Can Change Corporate Policy

    Shareholders are getting a bigger say in how companies are run. Find out how you can be heard.
  7. Investing

    How to Attend Berkshire Hathaway's Annual Meeting (BRK.A, BRK.B)

    An overview of what is required to go to the Berkshire Hathaway Annual General Meeting.
  8. Financial Advisor

    Fund Boards: What They Do and Why You Should Care

    Fund boards oversee management and operations of the fund on behalf of shareholders. Make sure you've got a board that will look out for you.
  9. Small Business

    Governance Pays

    Learn about how the way a company keeps its management in check can affect the bottom line.
  1. How do a corporation's shareholders influence its Board of Directors?

    Find out how shareholders can influence the activity of the members of the board of directors and even change official corporate ... Read Answer >>
  2. How can investors influence the c-suite?

    Learn how investors can influence corporate management. Find out about methods that investors use to take control and some ... Read Answer >>
  3. What is the difference between a president and a CEO?

    In corporate governance and structure, the roles of both CEO and president often vary across firms. Read Answer >>
  4. How does the bottom line affect shareholder returns?

    Understand the two factors that cause the bottom line of a company to affect the returns to its shareholders. Learn how a ... Read Answer >>
  5. What are the advantages of ordinary shares?

    Dividends and ownership rights are two advantages of investing in ordinary shares. Read Answer >>
Hot Definitions
  1. Standard Deviation

    A measure of the dispersion of a set of data from its mean, calculated as the square root of the variance. The more spread ...
  2. Entrepreneur

    An Entrepreneur is an individual who founds and runs a small business and assumes all the risk and reward of the venture. ...
  3. Money Market

    The money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities ...
  4. Perfect Competition

    Pure or perfect competition is a theoretical market structure in which a number of criteria such as perfect information and ...
  5. Compound Interest

    Compound Interest is interest calculated on the initial principal and also on the accumulated interest of previous periods ...
  6. Income Statement

    A financial statement that measures a company's financial performance over a specific accounting period. Financial performance ...
Trading Center