A proxy is a person who is designated by a member of a company to attend a general meeting and vote in place of that member.
Section 136 of Companies Act 1963 provides that any member of a company entitled to attend and vote at a meeting of the company shall be entitled to appoint another person (whether a member or not) as his/her proxy to attend and vote instead of him/her. A proxy so appointed shall have the same right as the member to speak at the meeting and to vote on a show of hands and on a poll.
The Key Points
- Proxy voting simply allows shareholders to use their votes through a third party without the need to attend the meeting. The use of proxies enables investors to own and vote on equities in companies around the world.
- A member may appoint more than one proxy in respect of their shareholding provided that each proxy represents different shares within that member’s shareholding.
- A proxy can speak at the meeting and vote on a show of hands as well as on a poll.
- If a member has appointed a proxy and then attends and votes at the meeting, his/her presence will automatically cancel the authority given to the proxy.
- All notices of company general meetings must display a statement about the right of a member to appoint a proxy (C.A. 1963 s.136 (3)).
- The shareholder must lodge the appointment of the proxy no later than 48 hours prior to the meeting. The 48 hours is calculated by reference to working days (C.A. 1963 s.136 (4)).
- Proxies can be revoked at any time before the vote is taken.
Types Of Proxies
A general proxy allows a proxy holder to vote however he or she sees fit on any matter.
A directed proxy specifies how the proxy holder should vote.
Under the common law a proxy is required to vote in accordance with any voting directions provided by the appointing shareholder.
The Proxy Card
The proxy card should include the name of the company, the name and address of the member, the name and address of the person being appointed proxy, and the details of the meeting. The proxy should be signed by the member. If the proxy is a limited proxy it would also include any resolutions that are to be voted on at the meeting and a place for the member to check “yes” or “no” or a place to vote for any candidates being considered for office.