28. AGMs


Organisations tend to fall into one of two broad categories. Those with a separate membership and those without. For those without – the committee are effectively both the members and the governors – there is no distinction. For those with a membership the Annual General Meeting (AGM) is the main mechanism for the members to influence the committee. Firstly by electing the committee members and secondly by passing resolutions that influence how or what the committee does. It is also the main opportunity for the committee to report on their activities and be held to account for them by the membership. Ultimately, if the members feel that the committee has not done a good job they can elect a new committee (NB only if all places are contested each year. In some committees there is a system of overlapping terms of office so only a third are elected each year).
AGM tend to have two main roles.
1. Fulfilling a legal/constitutional obligation
2. A broader role of the AGM.

What legal and constitutional obligations are there in relation to AGMs?

Your constitution may or may not have something to say about AGMs. If it does then you should follow it. If it says nothing then you may still be legally obliged to hold an AGM depending on your legal status. Up until October 2007 all companies (limited by guarantee or shares) were required to hold an AGM. New legislation has removed this requirement unless the constitution specifically requires an AGM to be held. Registered charities that are associations must hold an AGM. Trusts that are not incorporated usually don’t have to hold one. [Refer to your regulatory body for precise requirements.] Generally the requirement is to carry out a process to elect the committee, approve the committee’s annual report and approve the accounts. Larger organisations may also be required to formally chose the auditor for the following year. If you have any doubts, or need clarification it may be wise to seek advice. A good source of accurate advice regarding AGMs is your auditors, who will hopefully answer you question free of charge. Or try the Charity Commission.

What is the broader role of the AGM?

The legal duties above fulfil the minimum requirements to elect the committee and for the committee to be held to account. However, many groups and associations will find this to be a bare minimum, particularly in relation to holding the committee to account and general communication between members and the committee. Many organisations have evolved quite elaborate mechanisms to take the AGM beyond mere legal compliance to an opportunity for real dialogue between the members and the committee. AGMs can also be a useful opportunity to present yourselves to your wider audience – from the general public, to people you think should be members, to those you are seeking to influence or work with or raise funds from. To make the AGM more interesting to these groups it is common to include some activity that will interest them, such as a talk or debate, an awards ceremony, or some social/cultural activity for example music or dance. Ambitious AGMs may combine two or more of these ideas.

Do we have to have an AGM?

Yes, if your constitution requires it or if you or a charitable association. Before October 2007 all companies (including those limited by guarantee) also had to hold an AGM, but the Companies Act 2006 has changed that and companies may dispense with AGMs. Even if your constitution required one you can remove it. However, think carefully before you take this option – you will probably have to amend other clauses in the constitution as well, such as how you elect trustees and appoint and remove auditors. Charitable Trusts in general don’t have to but read your constitution carefully as some are required to hold an AGM anyway by their constitution.

Should we hold an AGM even if we’re not legally obliged to?

An AGM can be a useful opportunity to promote yourselves. See ‘The broader role of the AGM’ above. Think about what it is you want to achieve and who your potential audience is.

How do we organise the AGM?

The same principles of committee organisation apply, but bear in mind that you will probably need to give more notice of the meeting to more people. The housekeeping arrangements will also require more thought as generally you will need a bigger room , more catering and so on. There are several good guided to running an AGM available; try Charity Commission CC48, Fife CVS, or the old (but good) Nacvs guide Part 1 and Part 2.

Between AGMs how should the members and the committee communicate?

The AGM is the peak event in most organisations year, bringing members and the committee together in place for several hours. But don’t forget about communication the rest of the year. There should be processes that keep members in touch with the latest committee activities and processes that allow members to communicate back to the committee. By far the commonest mechanism is the Newsletter – but this needn’t be the only one or even the main one. The internet has great potential for communication between the committee and members with the added benefit that it’s free to use (provided your members have computer and internet access), whereas the cost of paper newsletters can be considerable. Other options are

  • Regular consultation meetings
  • Holding some committee meetings as ‘open’ meetings
  • Designating some committee members to link up with certain constituencies.

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A Word About Words

This site is aimed at those who govern (control) small organisations - whether they are charities, companies, both or neither. Those who govern them may be called a variety of names. We have chosen to use mainly 'management committee' and occasionally 'committee member' or 'trustee'. more...
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