An annual general meeting, commonly abbreviated as AGM, refers to a mandatory gathering held by companies or organizations once a year. It involves the participation of shareholders, board members, senior executives, and other relevant stakeholders who convene to discuss and make decisions on critical matters concerning the entity. Defined by its legal significance, an AGM aims to provide an opportunity for shareholders to exercise their rights, exercise their voting power, and receive updates on company performance.
During the meeting, the company's financial statements, including the annual report, balance sheet, and income statement, are presented to shareholders. This allows them to evaluate the business's financial health, scrutinize the performance of directors and officers, and express concerns or seek clarification. Moreover, an AGM serves as a platform to elect or re-elect directors and auditors, approve dividend payments, consider changes to governing documents, and examine proposed resolutions or amendments.
The AGM also acts as the primary avenue for communication and engagement between the company's management and shareholders. It allows shareholders to voice their opinions, ask questions, and engage in constructive discussions. Shareholders may use this opportunity to address concerns, seek disclosures, or suggest improvements, promoting transparency and accountability within the organization.
An AGM typically adheres to a predetermined agenda set by the company, aiming to cover all relevant topics of discussion and decision-making. It is one of the key mechanisms for maintaining effective corporate governance and ensuring the best interests of the company and its shareholders are upheld.
