academy trust AGMs during COVID-19

The rules for calling and holding AGMs are set out in the Articles.

In this section we summarise some of the provisions in the Model Articles that are most likely to be relevant when determining your approach.

References to Article numbers in this section are to the relevant Model Article.

Timeframes

Under the Model Articles the Board have flexibility when to hold an AGM if they comply with two rules:

• an AGM must be held in each financial year (save that the first AGM must be held within 18 months from incorporation); and
• there must not be more than 15 months between AGMs.

Notice

The AGM is held at such time and place as the Trustees shall appoint (Model Article 19).

General Meetings (including AGMs) must be called on at least 14 clear days’ notice (Model Article 21). The Model Articles do also provide for shorter notice where Members representing 90% of the total voting rights at that meeting agree.

The notice must state the date, place and time of the meeting and the general nature of the business to be conducted at the meeting. If the notice of meeting relates to an AGM then the notice must state this.

If a special resolution is proposed, the notice must include the full text of the resolution and state that it is a special resolution. Although there is no legal requirement to include the text of ordinary resolutions, it is common practice to do so.

The notice:

• must also state that each Member is entitled to appoint a proxy; and
• should be sent to all the Members, the Trustees and the auditors (Model Article 21A).

The accidental omission to give notice of a meeting to, or the non-receipt of notice of a meeting by, any person entitled to receive notice shall not invalidate the proceedings at that meeting (Model Article 22).

Quorum

Under the Model Articles the quorum to transact business at a General Meeting is set at two (Model Article 23). The Model Articles state “Two persons entitled to vote upon the business to be transacted, each being a Member or a proxy of a Member or a duly authorised representative of a Member organisation shall constitute a quorum.”. In our view this means that you would need two individuals physically present at the AGM (the second could be a person who is not a member but who has been appointed as a proxy).

If a quorum is not present within 30 minutes of the start time in the notice (or a quorum ceases to be present) then the meeting is automatically adjourned until the same place, time and say of the week in the next week or to such other time and place as the Trustees determine (Model Article 24).

Proxies

The Model Articles provide for Members to appoint proxies to vote on their behalf. Proxies can be appointed generally or given specific direction how to vote.

The Articles will include a format for the appointment of a proxy and for convenience at the end of this document we have included the format from the Model Articles.

Whilst it would be typical for, say the Board Chair to be appointed as proxy, there is no specific rules as to who can be appointed as proxy.

For a proxy appointment to be valid it must “be deposited at the office or at such other place within the United Kingdom as is specified in the notice convening the meeting or in any instrument of proxy sent out by the Academy Trust in relation to the meeting not less than 48 hours before the time for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote”. You may therefore want to consider whether for administrative reasons it is better to specify in the AGM notice a different address to the Trust’s registered office.

Chair

You should check your Articles carefully. For older Articles, the Board Chair will, if present, preside as Chair. Under the current Model Articles, the Members present and entitled to vote shall elect by ordinary resolution one of their number to chair the General Meeting (Model Article 25).

Trustees

Pursuant to Model Article 27 Trustees are entitled to attend and speak at General Meetings. They do not get a vote though.

Trustees do not need to attend so if they are unable to attend that will not invalidate the AGM.

AGM Business

The business to be conducted at an AGM will vary between Trusts and will to some extent depend on the approach taken in the Model Articles on various points but we would expect some or all the following to be relevant:

• to elect a chair for the meeting (where the latest Model Articles have been adopted (i.e. where the older provisions for the Board Chair if present to act as chair do not apply));
• to receive and adopt the Trust’s annual accounts for the last financial year together with the directors' report and auditor's report on those accounts;
• to appoint or reappoint (as applicable) the Trust's auditors for the next accounting period;
• where retirement by rotation is adopted and the AGM is used as the meeting to make appointments, to appoint and/or reappoint trustees under the Member appointment provisions in the Articles (Model Article 50).

This is probably the easiest most straightforward option to take where Government restrictions on social distancing mean that it would be difficult to hold your AGM when you originally anticipated.

As explained in the previous section the Board determine when the AGM will be held. However, there are certain restrictions on the frequency of AGMs that we have explained that would need to be complied with. This is therefore a temporary solution.

To recap, the Board will need to ensure when setting the AGM date that:

• an AGM must be held in each financial year (save that the first AGM must be held within 18 months from incorporation); and
• there must not be more than 15 months between AGMs.

For example, if you are due to hold your AGM in December 2020 and the last AGM was held on 19th December 2019 you could look to hold the AGM at any point up to 19th March 2021.

This option would only really apply where you have already sent out the notice calling an AGM.

Where the Trust has already issued its AGM notice, the Trust could look to open the AGM and then immediately adjourn it. There are two ways the AGM could be adjourned:

1. relying on the automatic adjournment provisions (Model Article 24); or


2. the chair of the AGM can also adjourn General Meetings.

Automatic Adjournment

Pursuant to Model Article 24 if a quorum is not present within 30 minutes of the scheduled start time in the notice the AGM would be automatically adjourned until the same place, time and day of the week in the next week or to such other time and place as the Trustees determine.

You would also need a Board resolution to specify a different time and place to avoid repeating this process each week.

Chair’s Adjournment

Here the Chair would need to open the meeting (which would need to be quorate – most likely through proxy appointments).

The Chair can, with the consent of a majority of the Members at a meeting at which a quorum is present, adjourn the meeting from time to time and from place to place (but no business shall be transacted at any adjourned meeting other than the business which might properly have been transacted at the meeting had the adjournment not taken place).

When a meeting is adjourned for 14 days or more, at least 7 clear days’ notice shall be given specifying the time, date and place of the adjourned meeting and the general nature of the business to be transacted. Otherwise it shall not be necessary to give any such notice (Model Article 28).

If you adopt this approach then:

• see option 4 for options regarding AGM venue following consideration of the implications of having to state in the AGM notice the venue for the AGM;
• you will want to ensure that the meeting chair has been appointed by the proxy forms where the Articles do not specify that the Board Chair will chair General Meetings.

If critical members resolutions need to be passed and you were planning to use the AGM to do so, then the Trust could delay the AGM (option 1) and members could then use the written resolution procedure in accordance with the Articles to pass the necessary resolutions.

You would adopt option 1 as your first step. You should note that the written resolutions could not be used in place of an AGM.

You would then proceed to pass the necessary written resolutions in the usual way. For convenience we include a summary below.

Written Resolutions

The Companies Act 2006 (Act) provides a statutory procedure for Members to be able to pass written resolutions. The procedure can be used for both ordinary and special resolutions but there are some resolutions where it cannot be used. These are:

• removing a trustee from office before the expiration of his term under section 168 of the Act; and
• removing the auditors from office before the expiration of their term under section 510 of the Act.

In both cases, any such resolution must be passed at a General Meeting.

Written resolutions will typically be proposed by the board of Trustees but the Act does include a procedure so that Members can require the Trust to circulate a written resolution.

For written resolutions proposed by Trustees, in summary:

• a copy of the resolution must be sent to every eligible Member either in hard copy, electronic form or through a website;
• copies must be sent at the same time (so far as reasonably practicable) to all eligible Members or, if it is possible to do so without undue delay, the same copy of the resolution may be submitted to each eligible member in turn;
• the copy of the resolution must be accompanied by a statement informing the Member how to signify agreement to the resolution and about the date by which the resolution must be passed if it is not to lapse
Where the Trustees propose the written resolution, it is good practice to have board minutes to evidence this decision.

Eligible Member means the Members who would have been entitled to vote on the resolution on its circulation date. This is likely to be every Member in most cases.

You should also note that under the Act auditors are entitled to receive all communications relating to a written resolution as must be supplied to a Member.

Here you would look to hold the AGM whilst observing the relevant Government guidance on social distancing that applies at the time of the planned AGM.

To implement this option would require some planning and co-ordination in advance. We set out below two practical issues you would need to work through.

Proxy

The Model Articles do allow the members to appoint a proxy and if they appointed a proxy who lived in the same household (they should be an adult) as the convening Member, the quorum requirements at Model Article 23 would be met.

When appointing a proxy, Members have the choice to direct how the proxy to vote as explained above. It is likely that it would make sense that the form of proxy directed the proxy how to vote in these circumstances. In particular, where the Articles require the General Meeting to elect the chair for the meeting you will want to ensure that a resolution appointing a Member who will be present in person at the meeting is included on the proxy appointment form and AGM notice.

AGM Venue

A explained above the AGM notice will need to specify the venue for the AGM. Under the Model Articles, notice of the AGM will need to be sent to all the Members, the Trustees and the auditors. So whilst the home of one of the Members may be the easiest venue to hold the AGM (with an adult member of their household acting as proxy) Members may not be comfortable with their home address appearing on the AGM notice.

If that is the case then potential alternatives (whilst respecting the then relevant rules on social distancing) could include:

• if one of the Members is a key worker then their place of work (but you would want to obtain prior consent before doing so);
• a public place close to their home that would not contravene Government advice on social distancing (e.g. a public green/common land that is open to the public).

The relevant provisions are set out in Schedule 14 of the 2020 Act. Schedule 14 applies to a “qualifying body” which includes companies within the meaning of the Companies Act 2006 and so academy trusts.

Under paragraph 3, general meetings held during the relevant period (currently up to 30 December 2020 but this could be extended in incremental steps to 5 April 2021):

• need not be held at any particular place (paragraph 3(3)).
• may be held, and any votes may be permitted to be cast, by electronic means or any other means (paragraph 3(4)).
• may be held without any number of those participating in the meeting being together at the same place (paragraph 3(5)).

The Schedule also provides that:

• members do not have a right to attend the meeting in person, to participate in the meeting other than by voting, or to vote by particular means.
• the provisions of the constitution or rules of the qualifying body have effect subject to the Schedule.

Proxy Voting Form
[insert trust name] (the Trust)

I/We …………, of ……………, being a Member/Members of the above named Trust, hereby appoint ………… of …………, or in his absence, ………… of ………… as my/our proxy to attend, speak and vote in my/our name[s] and on my/our behalf at the annual general meeting/general meeting of the Trust to be held on [date], and at any adjournment thereof.

Signed …………………………………………
[insert date]

OR where Member wishes to give voting instructions

I/We …………, of ……………, being a Member/Members of the above named Trust, hereby appoint ………… of …………, or in his absence, ………… of ………… as my/our proxy to attend, speak and vote in my/our name[s] and on my/our behalf at the annual general meeting/general meeting of the Trust to be held on [date], and at any adjournment thereof.

This form is to be used in respect of the resolutions mentioned below as follows:

• Resolution No. 1 *for *against
• Resolution No. 2 *for *against.

*Strike out whichever is not desired.

Unless otherwise instructed, the proxy may vote as he thinks fit or abstain from voting.

Signed …………………………………………
[insert date]