The general meeting season is approaching and each year we at Lindahl help a large number of listed companies to prepare and hold their annual general meetings.
The temporary legislation that made it possible to hold fully digital general meetings or general meetings only by postal voting ceased to apply on 31 December 2022. However, many listed companies have introduced provisions on postal voting in their articles of association (which is a prerequisite for postal voting to be used) in advance of this year’s general meeting season. Our assessment is that many companies will offer postal voting as an alternative to physical participation or participation by proxy at the general meeting.
REQUIREMENTS FOR A MORE EVEN GENDER BALANCE
A new EU Directive on improving the gender balance among directors of listed companies entered into force in December 2022. However, the Directive allows Member States to defer the implementation of mandatory quota legislation provided that the under-represented gender holds at least 30% of the non-executive director positions or at least 25% of all non-executive director positions, including that of CEO, on a continuous basis. In response to the new Directive, in February 2023, the Swedish Corporate Governance Board published an open letter to shareholders, members of nomination committees and employee organisations in Swedish listed companies. According to the Board’s summary, as of 21 June 2022, the overall proportion of female directors at Swedish listed companies amounted to 36.2% (including employee representatives) and 35.4% (including employee representatives and the CEO), which means that conditions for postponing the implementation of the Directive currently exist in Sweden. However, the Board particularly urges shareholders and nomination committees to continue working towards the long-term goal of ensuring that at least 40% of directors of Swedish listed companies are of the underrepresented gender.
REVIEW THE COMPANY'S REMUNERATION GUIDELINES
A Board of Directors of a listed company on a regulated market should carry out an annual review of whether there is a need to update the company's remuneration guidelines for senior executives. Under the Swedish Companies Act, the Board of Directors must draw up new draft remuneration guidelines whenever there is a need for significant changes and at least every four years. Changes to the ITP1 plan whereby pension provisions will no longer be made on salaries exceeding a particular amount (currently SEK 185,750 per month) apply from 1 January 2023. This may be relevant for companies whose remuneration guidelines state that pension provisions for senior executives will be limited to what applies under the ITP1 plan. If the intention is for a senior executive to receive additional pension provisions for salary that exceeds the income ceiling, the Board of Directors should consider proposing updated guidelines that address this.
THE KEY TO A SUCCESSFUL ANNUAL GENERAL MEETING
Our experience shows that preparation and long-term planning are the key to a successful annual general meeting. Below are some examples of matters that need to be dealt with in advance of the meeting.
- The Board of Directors should discuss what proposals should be presented at the meeting (in addition to the usual matters to be dealt with at an annual general meeting) in good time before the meeting. If the intention is to submit a draft resolution on a new incentive scheme, preparations should begin in good time so the draft can be properly prepared.
- Monitor the work of the nomination committee and ensure that the nomination committee’s proposals and reasoned opinion are completed well in advance of the publication of the notice.
- The Board of Directors must make a decision to call a general meeting. Schedule a Board meeting to approve the notice before it is submitted to the newspapers. We recommend that the notice be published by means of a press release when the Board of Directors has decided to call a general meeting (though no later than the evening before the publication of the notice in the newspapers and on the website).
- A notice and announcement must be published in the newspapers and on the website no later than four weeks in advance of the general meeting. Bear in mind that the notice and announcement need to be submitted to the newspapers 2–3 working days before publication.
- Make sure that relevant documents and documentation for resolutions (such as the annual report and auditor’s report, proxy forms and draft resolutions) are available on the website.
- It is a good idea to prepare the register of voters, draft minutes and general meeting press release in advance of the meeting. The general meeting press release must be published as soon as possible after the general meeting. The minutes must be made available on the company’s website no later than two weeks after the general meeting.
- Certain resolutions (e.g. changes to the Board of Directors and issue authorisations) must be reported to the Swedish Companies Registration Office for registration.
You are very welcome to contact us if you have any questions in advance of the annual general meeting or if you require our help with preparations for the general meeting.
