Difference Between Annual General Meeting and Board Meeting

Edited by Diffzy | Updated on: September 22, 2022

       

Difference Between Annual General Meeting and Board Meeting Difference Between Annual General Meeting and Board Meeting

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Introduction

It is human nature to believe in and defend one's beliefs and viewpoints. You have specific thoughts and suggestions about items that might impact the surrounding environment, whether you work in a mill, a factory, a corporate organization, or manage your own business. People listen to one another's thoughts or opinions and determine whether to act on a specific idea or viewpoint presented by a person depending on the advantage it provides to them or their business; this process is known as a meeting. A meeting of members should be organized to seek permission from the members on particular business topics. The board convenes the annual general meeting to conduct regular business and unique business (if any) of the firm, whereas particular business is handled at the extraordinary public meeting.

Although the business has a different legal identity from its members, they form the firm as a legal entity. Nonetheless, because the company is a fictitious person, its will is represented by resolutions made at meetings. The corporation has three business meetings: an annual general meeting, an extraordinary general meeting, and a class meeting.

Annual General Meeting vs. Board Meeting

Although the business has a different legal identity from its members, they form the firm as a legal entity. Nonetheless, because the company is a fictitious person, its will is represented by resolutions made at meetings. The corporation has three business meetings: an annual general meeting, an extraordinary general meeting, and a class meeting. Annual Meetings are conducted once a year and are vital for deciding on the organization's or enterprise's future operations and activities to enhance and achieve better outcomes and perform better in the organization's field. In addition, often during the year, board meetings are held to examine the organization's performance or firm and keep management accountable for carrying out the board members' activities and regulations.

Differences Between Annual General Meeting And Board Meeting in Tabular Form

Table: Annual General Meeting vs. Board Meeting
Parameter Of Comparison
Annual General Meeting
 Board Meeting
Conceptual
 
 
 
The meeting is conducted once a year to protect the interests of shareholders and investors and review the company's financial situation.
The meeting is conducted more than once a year to review the management's performance and to determine the organization's subsequent activities.
Significantly affect
Annual Meetings have little influence on the whole business because their primary focus is on the shareholders and investors.
Board meetings have a more significant influence on the whole business because they focus on determining future actions and choices for the business's improvement.
Features
 
 
 
 
Annual Meetings assist shareholders and investors in staying informed about the company's investment and financial health.
Board meetings assist the business in maintaining the systematic growth and leadership essential for it to flourish and profit significantly.
Drawbacks
Because annual meetings are only held once a year, it's tough to keep up with the organization's real-time performance.
Board meetings are held regularly, and they may take up a lot of management time for things that don't matter.
 SignificantMembers
 
 
 
Shareholders and investors who have invested in this corporation or have a stake in this organization are attending this meeting.
Members of the board of directors who make crucial decisions about the organization's management attend this meeting.
Duration
Must be held within nine months of the fiscal year's conclusion.
It must be held once every three months and at least four times a year.
Time and Date
 
 
 
It can be held during business hours only on any day other than a national holiday.
It can take place on any day of the week, including national holidays, and at any time of day.
Arranged By
Board
Board, Board on shareholder request,
 

What Is Annual General Meeting?

An annual general meeting (AGM) is a yearly gathering of a company's interested shareholders. At an AGM, the company's directors submit an annual report including information for shareholders on the company's performance and strategy. In addition, shareholders have voting rights to vote on current topics such as appointments to the company's board of directors, CEO remuneration, dividend payments, and auditor selection. As the name implies, the annual general meeting (AGM) is a yearly event where members can discuss the company's performance, profitability, and day-to-day operations. According to the Companies Act of 2013, any company that is not a sole proprietorship must hold an annual general meeting at least once a year to handle routine business.

Suppose the business does not hold an annual general meeting during any fiscal year. In that case, members can petition the competent authorities, issuing instructions for calling the company's Annual General Meeting.

  • An annual general meeting (AGM) is a yearly gathering of a company's interested shareholders.
  • At an annual general meeting (AGM), the company's directors report the company's financial performance, and shareholders vote on the topics at hand.
  • Shareholders who cannot attend the meeting in person may usually vote by proxy, which can be done online or by mail.
  • Shareholders who cannot attend the meeting in person may usually vote by proxy, which they can do online or mail.
  • At an AGM, there is usually a period set aside for shareholders to question the company's directors.
  • Activist shareholders may use an AGM to convey their concerns.

Understanding Annual General Meeting

An annual general meeting, also known as an annual shareholder meeting, is convened to allow shareholders to vote on corporate matters and the election of the company's board of directors. In major corporations, this gathering is sometimes the only time of year when shareholders and executives engage. The specific regulations regulating an AGM differ depending on the jurisdiction. According to many states' incorporation statutes, public and private corporations must have AGMs, albeit the standards are more strict for publicly listed companies. An Annual general meeting may be called if a firm has to settle a situation between annual public meetings.

The Securities and Exchange Commission requires public businesses to submit annual proxy statements, Form DEF 14A, with the SEC (SEC). The filing will include the annual meeting date, time, venue, executive remuneration, and any essential items relating to shareholder voting and proposed directors. Annual general meetings (AGMs) are crucial because they give transparency, allow shareholders to participate, and hold management accountable.

Annual General Meeting Qualifications (AGM)

The regulations regulating an AGM are included in the corporate bylaws that regulate a corporation and its jurisdiction, memorandum, and articles of organization. There are regulations, for example, defining how far in advance shareholders must be advised of where and when an AGM will be conducted and how to vote by proxy. By law, the following things must be considered at an AGM in most jurisdictions:

  • Previous meeting minutes: The last year's AGM minutes must be presented and approved.
  • Financial statements: The corporation submits its yearly financial accounts for approval to its shareholders.
  • Ratification of director actions: The shareholders approve and ratify (or not) the board of directors' decisions made in the preceding year. This frequently includes the distribution of a dividend.
  • Board of Directors Elections: The shareholders elect the board of directors for the following year.

The following are the two types of Annual General Meetings:

  1. The first Annual General Meeting shall be called within nine months after the fiscal year's conclusion. As a result, no AGM is required in the first year of the company's existence.
  2. The subsequent annual general meeting, which must be convened within six months of the end of the financial year or 15 months from the previous AGM, whichever comes first, is known as the subsequent annual general meeting.

What Is Board Meeting?

A board meeting is a formal assembly of a Board of Directors regularly. Whether public or private, corporate or non-profit, most organizations are eventually administered by a group known as the Board of Directors. Members of this organization meet regularly to address strategic issues. Board meetings are held with the central topic of the company's growth as the meeting's primary focus. The organization's chairman chooses members of this meeting to oversee the company's systematic development.

Members of this Meeting keep an eye on the management and the work that has been allocated to them to increase the organization's efficiency and productivity. Board meetings can be convened whenever and as many times as the members see fit to make decisions and allocate future operations to the company.

Understanding Board Meeting

A board meeting's frequency, duration, minimum quorum, and agenda are all subject to regulations. The members are called Directors and are elected by the stockholders in incorporated companies. Directors can be chosen from within the firm, mainly from the senior management team and from the outside, from industry experts and reliable individuals.

Business owners can also serve as directors on boards of directors in some situations if they want. A typical board meeting has a Chairman who runs the conference and a Secretary who takes notes and ensures that all appropriate decisions are appropriately documented. The primary purpose of the board meeting is to make final decisions on strategic company concerns that should not be delegated below. Key performance metrics connected to various operative and administrative sectors of the organization are frequently monitored during board meetings. They can also approve and manage worldwide budgets and make choices concerning necessary executive appointments and dismissal.

Structure of a board meeting

Depending on how developed a firm is, board meetings may differ. For example, larger firms often follow rigid criteria to help offer order and structure, but start-ups and tech enterprises sometimes take a more pragmatic approach. Despite this, many aspects of these board sessions are relatively similar.

Before a board meeting, a document is circulated that includes a report from each director outlining everything that needs to be addressed and their value judgments on different subjects.

When a board meeting starts, someone, generally the company's CEO, summarizes how successfully the company's goals are being realized and any concerns that need to be handled. Directors may also speak on their areas, although they may be there to answer questions if the report suffices.

Following that, a board member will bring up any issues that they believe need to be addressed and comment on progress toward specific targets. Following that, the board chair will stimulate conversation by asking for feedback on what was given and taking action on any concerns. To review the CEO's and other executives' performance, the board may choose to hold a meeting without them present. Other procedural motions, such as certifying stock option awards, may be necessary before the meeting is adjourned.

Main Difference Between Annual General Meeting And Board Meeting in Points

  • Every organization, regardless of where it is based or in which nation it operates, is required by law to have at least one annual meeting every year to protect and serve the interests of its shareholders and investors.
  • Board meetings can be called in an emergency or on any given day. They can be held several times to make critical decisions and assess the organization's or enterprise's management.
  • Annual meetings have a lower impact, but Board meetings have a higher impact and are more beneficial.
  • Board meetings might take up more time than yearly meetings, resulting in lost productivity.
  • Shareholders and investors are vital members of Annual Meetings, whereas members of the Board of Directors are crucial members of Board Meetings.
  • The annual general meeting can only be held during business hours on days that are not national holidays, while board meetings can happen at any time and on any day of the week, including national holidays.
  • The event must occur within nine months of the fiscal year's end, whereas it must be held at least four times a year and once every three months.

Conclusion

Meetings play a significant role in the world's operation. Meetings allow us to interact and establish a course of action that may be helpful to us. Various points of view are shared under one roof to develop and obtain better outcomes, whether they be individual or combined results. Annual Meetings and Board Meetings are two types of meetings held by large organizations and businesses, both of which are required for the management to operate well and for the firm to thrive. Meetings like these serve to retain a sense of general authority and perspective on the company's performance, direction, and growth. Without a united effort and supervision, no primary objective can be realized.


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"Difference Between Annual General Meeting and Board Meeting." Diffzy.com, 2022. Sun. 02 Oct. 2022. <https://www.diffzy.com/article/difference-between-annual-general-meeting-and-board-307>.



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