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6. Best Practice Guidelines for Shareholders
- ISEAS–Yusof Ishak Institute
- Chapter
- Additional Information
55 Chapter 6 Best Practice Guidelines for Shareholders One of the main principles underlying good corporate governance is to guarantee the rights and equality of each shareholder, especially in shareholders’ meetings. The ideal meeting should have simple and transparent procedures that encourage the practice of equality for each and every shareholder. However, in some cases shareholders’ meetings in some companies were not conducted in a proper or appropriate way. In some cases the meetings did not even comply with related laws and regulations. Some companies failed to treat all their shareholders fairly and equally. Shareholders’ rights and benefits were often not given to each and every shareholder. Those transgressions may have arisen from the companies’ executives not knowing, misunderstanding , or even intentionally breaking the laws and regulations concerning conduct towards shareholders. To prevent these cases from occurring again there should be an unbiased, reliable person who takes part in the proceedings to make the whole process more transparent and fair for each and every shareholder and to comply with all related laws and regulations. The Stock Exchange of Thailand (SET) may now require listed companies to appoint a person in charge of superintending a shareholders’ meeting in accordance with the above principle. 56 Corporate Governance of Listed Companies in Thailand The person in charge of superintending a shareholders’ meeting may be an auditor approved by the Securities and Exchange Commission (SEC) or a financial advisor or person specified by SET and approved by SEC. These persons have the responsibility of overseeing the shareholders’ meetings to assure that they are conducted transparently and in accordance with all related laws and regulations. The responsibilities begin with the examination of the process for verifying documents of shareholders or proxies who have the right to attend the meeting. Their responsibilities also include determination of quorum, superintendence of the meeting, and examination of minutes of the meeting as well as other related documentation and evidence. Accordingly, in order to enable listed companies to better understand the duties and responsibilities of the person in charge of superintending a shareholders’ meeting and also to better standardize these practices of the person to permit better transparency, equality, and compliance with the related laws and regulations, SET has set forth a sample of duties and responsibilities of such a person as follows. SUPERINTENDENCE PRIOR TO SHAREHOLDERS MEETING A person in charge of superintending a shareholders’ meeting should perform superintending function to ensure that the listed company implements proper procedures for the attendance of meeting. Inspection of Documentation The person has to ensure the examination of documentation or evidence proving the right of the shareholders or proxies to attend a shareholders’ meeting, including a proper period of time for the examination of documentation and evidence and the registration [54.163.200.109] Project MUSE (2024-03-28 15:32 GMT) Best Practice Guidelines for Shareholders 57 as prescribed in a notice of shareholders’ meeting and under relevant laws. In case the listed company objects to the right of any shareholder or proxy to attend a shareholders’ meeting, the person in charge of superintending the meeting should examine the documentation of the shareholder or proxy to determine whether or not the refusal of his/her right to attend that meeting is proper in accordance with the method of examination of documents prescribed by the listed company. Determination of Quorum The person in charge of superintending a shareholders’ meeting has to ascertain whether or not the number of shareholders and proxies attending the meeting forms a quorum before the commencement of the meeting. In the event that a period of one hour from the appointed time has lapsed and the number of shareholders attending the meeting is still insufficient to form a quorum, the person should ensure the implementation of the following: 1. If the meeting is convened on the requisition of the shareholders , it shall be revoked. 2. If the meeting is convened on the requisition of the directors, the listed company shall reconvene a shareholders’ meeting by sending a notice in advance not less than fourteen days prior to the date of the meeting. In that latter meeting a quorum is not compulsory. In other words, a quorum can be formed irrespective of the number of shareholders or proxies (if any) present at the meeting. SUPERINTENDENCE OF SHAREHOLDERS MEETING A person in charge of superintending a shareholders’ meeting should ensure that the meeting is conducted in order, with transparency, and in accordance with relevant laws and regulations. 58 Corporate Governance...