Annual Meeting

Annual Meeting

Annual Meeting

Did you know that every corporation is required to hold an annual meeting for shareholders, usually held right after the end of the firm's fiscal year, at a time and place designated in the bylaws? For your information we have outlined the key elements of such as meeting:

The annual meeting usually includes the following activities:

  • Election of directors whose terms are up for renewal or to fill vacancies on the board of directors,
  • Declaration of a dividend and/or changes in the dividend policy,
  • Review of the corporation's annual report,
  • Discussion of new projects and activities.

Before the annual meeting, each shareholder receives a proxy statement, describing matters to be voted on at the meeting, like the new members of the board of directors, and other matters the board wants shareholder opinion on. Usually, proxy votes can be mailed in.

Annual Report

Every corporation is required by law to have an annual report and/or a more complex, detailed document for shareholders.

The annual report includes information on the company and its current financial position.

Most corporate annual reports include:

  • A statement by the Chairman or CEO about the state of the business,
  • A narrative review of the past year, with new products, new research, happenings, and other current information for shareholders,
  • A discussion of changes in financial policies, dividends changes, and other matters of concern to shareholders,
  • Financial statements, including a balance sheet, income statement, and sources and uses of funds statements,
  • For publicly traded companies, an auditor's report must also be included. The auditor certifies that the financial statements were compiled using generally accepted accounting principles.

Electing Board Members

The shareholders elect the board members: one share, one vote. This is where the proxy statement comes in. Usually, a nominating committee prepares a slate of possible board members, who are voted on at the annual meeting.

Board members usually are elected for a term of several years, with staggered terms, to allow for a rotating and healthy mixture of experienced and new “blood”.

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