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PAPER NO. 9 MEETINGS:COMPLIANCE & ADMINISTRATION
UNIT DESCRIPTION
This paper is intended to equip the candidate with the knowledge, skills and attitudes that will enable him/her to comply with legal requirements for conducting meetings in both public and private sectors
LEARNING OUTCOMES
- A candidate who passes this paper should be able to:
- Demonstrate an understanding of the law and procedure of meetings
- Develop an agenda and prepare the relevant documentation for various meetings
- Plan and manage meetings in various
- Relate effectively with various stakeholders during
- Develop a compliance strategy and plan
- Conduct a compliance assessment/compliance health check
CONTENT
- Introduction to Meetings
- Legal and regulatory frameworks for different kinds of entities
- Meaning of a meeting
- Types of meetings; private and public sector meetings
- Maintaining order at meetings
- Police powers in relation to public and private meetings
- Meetings held in public places
- Meetings held in private places
- Convention, constitution and conduct of meetings
- Complying with requirements of various meetings
- Elections
- Resolutions
- Adjournments and postponement
- Role of the chair, secretary and members before, during and after meeting
- The meeting chairperson; qualifications, qualities and effectiveness, appointment and removal
- Law of defamation; nature and scope, defamatory statements, defences and legal remedies
- Professional framework of the corporate secretarial profession
- Evolution of the corporate secretarial profession (Global perspective and Case study of Kenya)
- Legal and regulatory framework
- Role and mandate of corporate secretarial professional bodies
- Procedures on registration and deregistration as a member
- Professional qualifications and qualities of a secretary
- Required knowledge, skills and competencies
- Appointment and vacation of office of the Secretary
- Professional engagement and clearance as a Corporate Secretary
- Rights, statutory and contractual obligations of a corporate secretary
- Role of corporate secretarial
- Continuous professional development
- Disciplinary procedures
- Governance standards and guidelines
- GS 001: General Meetings
- GS 002: Meetings of the Board
- GS 003: Minutes
- GS 004: Resolutions
- GS 005: Board papers
- GS 006: Registers and records
- GS 007: Filing annual returns
- GS 008: Common seal
- GG 001- Professional ethics
- GG 002- Role of the corporate secretary
- GG 005: Virtual meetings
- Members’ Meetings
- Meaning, nature and scope of members’ meetings
- Statutory meeting
- Annual general meeting
- Special general meeting
- Extraordinary general meeting
- Class meeting
- Meeting of debenture holders
- Duties of the corporate secretary before, during and after a general meeting
- Methods of holding company meetings
- Requirements for a valid physical, virtual and hybrid members’ meeting
- Requirements for circulation of resolutions
- Requirements for keeping records of corporate resolutions and meetings
- Board and Committee Meetings
- Meaning, membership and functions of the board
- Powers of the board
- Restrictions on board members’ powers
- First board meeting
- Subsequent board meetings
- Meetings of board committees
- Requisites of valid board and committee meetings
- Legal provisions regarding convening and management of board and committee meetings
- Board annual work plan and calendar
- The role of the secretary before, during and after board and committee meeting
- Meetings in Company liquidation
- Introduction to members’ and creditors’ voluntary liquidation
- Legal provisions for members’ and creditors’ voluntary liquidation
- Liquidation by the court
- Legal provisions for liquidation by the court.
- Meetings of County and National Assembly
- Standing orders
- Meetings of the House
- Requirements for a valid physical, virtual and hybrid physical, virtual and hybrid National Assembly meeting
- Swearing in of members and election of Speaker
- Sittings and adjournment of the House
- Quorum of the House
- Order of Business
- Motions and Amendments
- Divisions
- Rules of Debate
- Limitations of Debate
- Requirements for keeping records of County and National Assembly meetings
- Registration and Compliance Requirements for:
- Pension Funds
- Cooperative Societies
- Political Parties
- Public Benefit Organisations
- Education Institutions
- Religious Institutions
- Residents Associations
- Business names
- Partnerships
- Companies
- Foreign branch establishments
- Drafting, altering and registration of memorandum of association, articles of association, by-laws and other constitutive documents for various forms of organisations
- Shareholders agreements
- Seal and Authentication of documents
- Approval of Common Seal
- Form and content of Common Seal
- Authority and mode of affixation
- Register of documents executed under common seal
- Custody of Common Seal
- Official seal for use abroad
- Authentication of documents
- Legal, regulatory and professional requirements
- Listing at the securities exchange
- Listing requirements:
- Regulatory regime
- Listing process
- Types of public issue
- Role of the advisers: sponsor, broker, financial public relations consultants, lawyers, accountant, share registrars, other advisers
- Prospectus contents and approval
- Dematerialisation
- Statutory Reports, Registers, Records and Returns
- Meaning, types and contents
- Maintenance of statutory reports, registers, records and returns
- Legal and regulatory requirements on filing of statutory reports, registers, records and returns for various types of organisations
- Annual statutory returns
- Register of Members
- Register of Directors and Secretaries
- Register of Allotments
- Register of Transfers
- Register of Charges
- Register of Beneficial Owners
- Register of Residential Address,
- Register of charges and debentures
- Registers of interests in voting shares of a public company
- Tax, NHIF, and NSSF requirements
- Occupational safety and health format of registers, custody and retention of registers
- Access to records and registers
- Inspection: in person, right to request copies, fees
- Minute books: custody and retention, access rights
- Financial records: custody and retention, inspection
- Integrated Reporting
- Corporate governance report
- Directors’ remuneration report
- Retention periods for documents and registers
- Managing Classified information
- Preparation and approval of registers and records
- Process and procedure of effecting and filing corporate changes in: register of members; board members, registered capital, corporate, corporate address, corporate name, corporate objective
- Role and responsibilities of the corporate secretary in the external audit process and in the annual reporting cycle
- Penalties for non-compliance
- Compliance Strategy and Plan
- Nature of a compliance strategy and plan
- Preparation and execution of a compliance strategy and plan
- Monitoring and evaluation of the strategy and plan
- Draft a compliance checklist and schedule for the
- Compliance Assessment/Compliance health check
- Periodical fit and proper tests for directors, Corporate Secretary and Senior Management
- Annual review of implementation status of previous board resolutions
- Statutory review and comparison of Corporate and registry records to ensure consistency and full compliance with prevailing statutory rules
- Remedial work to regularise anomalies and to remedy compliance failings identified during the status check and statutory review procedures
- Preparatory compliance checks and remediation in view of transactional work
- Setting-up, monitoring and updating of corporate calendar
- Management of Share Registration Services
- Issue of shares at par/premium/discount
- Letters of offer, allotment letters renunciation
- Call on shares
- Rights and bonus issues
- Shares with different differential rights
- Issue and redemption of shares
- Immobilisation of share certificates
- Shareholder rights
- Share ownership registration
- Maintenance of registers of members and debenture holders
- Manual and electronic share registers
- Shares transfer and shares transmission
- In house and outsourced share registry service
- Managing unclaimed shares
- Role of the Secretary in share registration
- Management of Dividends
- Types of dividends
- Management of dividends
- Procedure in dividends payment
- Payment and taxation of dividends
- Declaration of dividends out of reserves
- Restriction on distribution
- Closure of register of members
- Managing unclaimed dividends
- Role of the Secretary in dividends payment
- Technology and Meetings
- Laws, regulations and guidelines on virtual meetings
- Technology in use in virtual meetings
- Planning and conducting virtual meetings
- Risks associated with virtual meetings and their mitigations
- Virtual meetings etiquette
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CHAPTER ONE
INTRODUCTION TO MEETINGS
Meaning of a meeting
Definition 1: A meeting is an event in which a group of people come together to discuss things or make decisions.
In the phrase “have a meeting”, a meeting is an arranged event at which a group of people come together to discuss a particular topic. The phrase is most commonly used to refer to business meetings, at which a group of employees discuss, for example, the work they intend to do on a particular project.
Types of meetings; private and public sector meetings
- Statutory meeting,
- Annual general meeting,
- Extraordinary general meeting,
- Class meetings.
Statutory Meeting
Every company limited by shares and every company limited by guarantee and having a share capital shall, within not less than one month and not more than six months from the date at which the company is entitled to commence a business, hold a general meeting of the members of the company.
This meeting is called the ‘statutory meeting.’ This is the first meeting of the shareholders of a public company and is held only once in the lifetime of a company.
Statutory report: The Board of directors shall, at least 21 days (based on Companies Act) before the day on which the meeting is to be held, forward a report, called the ‘statutory report,’ to every member of the company.
Procedure at the meeting;
- List of members,
- Discussion of matters relating to a formational aspect,
Objects of the meeting and report;
- To put the members of the company in possession of all the important facts relating to the company.
- To provide the members an opportunity of meeting and discussing the management, methods, and prospects of the company.
- To approve the modification of the terms of any contract named in the prospectus.
Annual General Meeting
Company to hold an annual general meeting every year. Every company shall in each year hold, in addition to any other meetings, a general meeting as its annual general meeting and shall specify the meeting as such in the notice calling it.
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There shall not be more than 15 months between one annual general meeting and the other. But the first annual general meeting should be held within 18 months from the date of its incorporation.
The Registrar may, for any special reason, extend the time for holding an annual general meeting by a period not exceeding 3 months. But no extension of time is granted for holding the first annual general meeting.
Every annual general meeting shall be called during business hours on a day that is not a public holiday.
It shall be held either at the registered office of the company or at some other place within the city, town, or village in which the registered office of the company is situated.
As regards holding of the annual general meeting, no distinction is made between a public company and a private company.
A general meeting of a company may be called by giving not less than 21 days’ notice in writing.
Annual general meeting a statutory requirement: The annual general meeting of a company is a statutory requirement. It has to be called even where the company did not function during the year.
Canceling or postponing of convened meeting: Where an annual general meeting is convened for a particular date, and notice is issued to the members, the Board of directors can cancel or postpone the holding of the meeting on that date provided power is exercised for bona fide and proper reasons.
Canceling of failure to hold an annual general meeting: If a company fails to hold an annual general meeting:
- Any member can apply to the Company Law Board for calling the meeting.
- The company and every officer who is in default shall be punishable with a fine.
Powers of Company Law Board to call an annual general meeting: If a company makes the default in holding an annual general meeting, any member of the company may apply to the Company Law Board for calling such a meeting.
Penalty for default: If a company makes the default is holding a meeting by Company Law or in complying with any direction of the Company Law Board is calling a meeting, the company, and every officer of the company who is in default, shall be punishable with fine.
Extraordinary General Meeting
A statutory meeting and an annual general meeting of a company are called ordinary meetings.
Any meeting other than these meetings is called an extraordinary general meeting. It is called for transacting some urgent or special business which cannot be postponed till the next annual general meeting.
It may be convened. (1) By the Board of directors on its own or on the requisition of the members; or (2) by the requisitionists themselves on the failure of the Board of directors to call the meeting.
- The extraordinary meeting convened by the Board of directors. The Board of directors may call an extraordinary general meeting:
- On its own.
- On the requisition of the members.
- An extraordinary meeting convened by the requisitionists Power of Company Law Board to order meeting: If for any reason it is impracticable for a company to call, hold or conduct an extraordinary general meeting, the Company Law Board may call an extraordinary meeting.
Class Meetings
Under the Companies Act, class meetings of various kinds of shareholders and creditors are required to be held under different circumstances.
Class meetings of the holders of different classes of shares are to be held if the rights attaching to these shares are to be varied.
Requisites of a Valid Meeting
A meeting can validly transact any business if the following requirements are satisfied;
- The meeting must be duly convened by proper authority.
- Proper notice must be served in the prescribed manner.
- A quorum must be present.
- A chairperson must preside.
- Minutes of the proceedings must be kept.
Maintaining order at meetings
Plan the meeting. No single effort saves more time during meetings than planning ahead. What needs to be accomplished at the meeting? Who is responsible for each item? Have minutes of the previous meeting, the agenda and other necessary documents been provided to each board member? At a minimum, a president should have a general outline of a meeting. Parliamentary books such as Robert’s Rules of Order Newly Revised recognize a standard order of business, which includes:
- Opening the meeting. The president should officially call the meeting to order by saying, “The meeting will come to order.”
- Approving the minutes.
- The manager or committee chairs should only be called on if they have something to report. No vote is needed unless action is recommended.
- Unfinished business. Unfinished business includes any motion that was not resolved at the previous meeting.
- New business. Members can introduce new items for consideration.
- Closing the meeting. In most bodies, the president can adjourn the meeting by asking, “Is there any objection to adjourning the meeting? Hearing no objection, the meeting is adjourned.”
Pick the right location. Typically, meetings in a relaxed setting tend to be relaxed about everything, including the meeting’s length. That’s fine. But does meeting in a board member’s living room give the right impression to a homeowner appealing a rules violation? A large association may want to present itself like the business it is. If you don’t have an on-site meeting room, you can find free or low-cost rooms at a library or place of worship.
A room’s layout also should be considered. Auditorium seating usually leads to less participation by board members. In contrast, a circle of chairs can invite too much discussion. Some boards prefer U-shaped seating, which encourages participation, but acknowledges the president is running the meeting.
Start on time. The president should arrive early to be better prepared to tackle the evening’s business. Delaying a meeting encourages board members to arrive late and punishes those who are on time.
Prepare an agenda. An agenda is more detailed than an “order of business” and lists the specific items that will be discussed during the meeting. Well-planned agendas make for shorter meetings that seem effortless.
At a minimum, an agenda should list the order in which items will be discussed. If there are several important items, prioritize them. Some boards prefer agendas be prepared in advance and used as a guide. Other boards adopt the agenda at the beginning of the meeting, locking in the discussion items and sequence.
Boards needing serious intervention may wish to consider a timed agenda, which gives a start and end time for each item. Such scheduling helps rein in long discussions, allowing several controversial items to be addressed. The president should announce when time has expired and wrap up the matter.
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Set an adjournment time. At a minimum, an agenda should list the time the meeting will adjourn. This will force the board to use its time more efficiently. Some boards plan their meetings to fit a set time, such as 90 minutes. They cover more important issues first and carry over items not addressed to the next meeting.
Use informal procedures when you can. Robert’s Rules notes that strict procedures can actually hinder business for boards with fewer than 12 members. For example, it recommends smaller boards not require a second on each motion and allow the chair to make motions.
Even during informal meetings, boards may wish to be more formal on matters of great importance or controversy. For example, they may want to observe limits on debate to keep the meeting on schedule or vote formally to help avoid legal challenges.
Use unanimous consent. A great time-saver for routine items is unanimous consent. Boards often use it to adopt routine reports, approve minutes or end debate. On noncontroversial matters, the president can ask if there is any objection to approving the item. If no one objects, it is approved. If a member objects, the president can ask for a motion and a vote.
Some boards even use a “consent agenda” at the beginning of a meeting that includes all noncontroversial items, such as approving minutes. Any board member can remove an item and place it on the regular agenda for consideration and a vote. The board then approves the remaining items on the consent agenda unanimously without discussion.
Require new business in advance. If board members never know how long meetings will last, it’s probably because they don’t know what issues will be raised. Require them to submit their new business items in advance. Allowing members to bring up issues at the meeting can lead to poorly thought-out motions. The board can allow new business to be brought up for the first time at the meeting as a late item (by suspending the rule) or carry it over to the next meeting.
Manage discussion. Encourage new discussion and prevent repetition by asking for comments from those speakers who have not spoken. Seek alternative views. After hearing from a proponent, ask if anyone opposed to the motion would like to speak. When members digress, note that their comments aren’t relevant to the discussion and promise to take it up at a later date.
Limit discussion. Set the discussion time prior to add
