What is an Extraordinary General Meeting (EGM)
An extraordinary general meeting (EGM), is a meeting other than a company’s annual general meeting (AGM). An EGM is also called a special general meeting or emergency general meeting.
Understanding an Extraordinary General Meeting (EGM)
In most cases, the only time shareholders and executives meet is during a company’s annual general meeting, which usually occurs at a fixed date and time.
However, certain events may require shareholders to come together on short notice to deal with an urgent matter, often concerning company management. The extraordinary general meeting is used as a way to meet and deal with urgent matters that arise in between the annual shareholders' meetings.
An EGM might be called to deal with:
- The removal of an executive
- A legal matter
- Or any other matter that can't wait until the next shareholders meeting
Another difference between an annual general meeting and an extraordinary general meeting is that an annual general meeting can only be held during business hours and not on a national holiday, while an EGM can be carried out on any day including holidays. Also, while a company’s board can only call an AGM, an EGM can also be called by the Board on the requisition of shareholders, requisitionist, or tribunal.
Example of an Extraordinary General Meeting
Extraordinary general meetings occur for a variety of reasons, but the meeting is usually called to discuss the potential removal of an executive. In December 2017, the London Stock Exchange (LSE) held an extraordinary general meeting, regarding claims that its Chairman, Donald Brydon, pushed out former chief executive Xavier Rolet. Rolet stepped down early in November 2017.
Although some EGMs occur outside of normal business hours, the London Stock Exchange's EGM took place on a non-holiday Tuesday. The motion was sparked by activist investor The Children’s Investment Fund Management (TCI), which had gotten 20.9% votes in favor of removing Brydon. However, the result of the EGM was that Brydon remained in his position.