At the Chartered Governance Institute’s Academy Governance Summit on 25 January 2021, I chaired a session in which I ran a poll asking attendees whether their academies ran an annual general meeting (AGM) and, if so, how it was used. It is a topical question given that trusts have just signed off their annual report and accounts which are often then presented to members at this meeting. The results of the poll were interesting.
Less than 10% reported that their academies did not hold an AGM. Earlier versions of the model articles of association had no specific requirement for an AGM to be held and there is no obligation in company or charity law to compel academies to do so.
70% of attendees used their AGM to provide a full update to members on progress and plans for the future, with 18% of these opening up the AGM to other stakeholders. Only 20% of attendees held an AGM but only used it to cover the basics for members.
The current model articles of association contain a provision for a trust to hold an AGM each financial year. The AGM is held in addition to any other general meetings of members in the year and is identified as such in the notices calling the meeting. No more than 15 months can elapse between one AGM and the next with the first held within 18 months of incorporation.
The Companies Act 2006 contains detailed requirements around holding a general meeting, including an AGM, such as the mechanisms for calling a meeting, notice, voting, quorum, proxies, etc. However, there is little in the way of content that must be covered in an AGM apart from reappointing the auditor. Commonly, the annual report and accounts is also presented in this meeting but they could equally be sent to the members (Companies Act 2006 s423).
The last couple of years has seen an increasing importance put on the role of the members and the AGM gives a perfect opportunity to inform and empower them. Members must be ‘eyes on and hands off’, not involved in the day-to-day management of the trust, but need to make sure that they are cognisant of the trust’s performance as they are also usually responsible for the appointment and, when necessary, removal of the majority of trustees. As the Academies Financial Handbook 2020 states ‘It is important, therefore, for members to be kept informed about trust business so they can be assured that the board is exercising effective governance.’ What better way to do this than via an annual meeting.
Furthermore, if a trust is truly trying to operate transparently and engage with stakeholders and the community, the annual general meeting offers an ideal opportunity to showcase the best of what has happened and respond to feedback if anything has not gone according to plan. It is unlikely that many trusts will see AGMs attracting thousands of attendees as in the corporate sector, but it will give an alternative route for building strong relationships and meaningful stakeholder engagement. What is there to lose?
katiecpd - The 'business' of schools 