Decision making

Here the intention is to modernise and simplify the ways in which companies take decisions. There are proposals to:

simplify the rules on written resolutions to make it easier for private companies to take decisions in this way, rather than by holding a formal general meeting. All resolutions of private companies will be capable of being passed in writing, with the exception of those to remove a director or an auditor
allow written resolutions to be carried with a majority of:
- over 50 per cent (for ordinary resolutions)
- 75 per cent (for special resolutions)
  of eligible votes, rather than requiring unanimity as at present
make greater use of electronic options for communicating with shareholders
allow shareholders in a private company to hold a general meeting at short notice with a 90 per cent majority, rather than the 95 per cent currently required
remove the requirement for private companies to hold an Annual General Meeting (AGM) unless the shareholders positively opt to do so. Public companies will continue to be required to hold an AGM. This must be within six months of the financial year end.

Comment
These proposals more accurately reflect the way in which private companies conduct their business in practice and are generally welcomed as useful changes. They should prevent unnecessary meetings from being held and therefore the decision making process should eventually become easier and quicker.