• HC-7 HC-7 Communication between Board and Shareholders

    • HC-7.1 HC-7.1 Principle

      • HC-7.1.1

        The company must communicate with shareholders, encourage their participation, and adhere to their rights.

        July 2011

    • HC-7.2 HC-7.2 Shareholders of the Same Type, Class and Series

      • HC-7.2.1

        All shareholders of the same type, class and series must be treated equally.

        July 2011

      • HC-7.2.2

        Within any type, series or class, all shares must carry the same rights. All investors should be able to obtain information about the rights attached to all types, series or classes of shares before they purchase. Any changes in voting rights must be subject to approval by those shareholders which are negatively affected.

        July 2011

      • HC-7.2.3

        Minority shareholders must be protected from abusive actions by, or in the interest of, controlling shareholders acting either directly or indirectly, and must have effective means of redress.

        July 2011

      • HC-7.2.4

        The board and corporate secretary must encourage the attendance of shareholders at all shareholder meetings, in order for shareholders to exercise their right to vote at such meetings.

        July 2011

      • HC-7.2.5

        Where shareholders are unable to attend, companies must make provision for such shareholder to vote by proxy, subject that such proxy is revocable and provides for two-way voting item by item (yes/no) and where proxies are provided to board members or senior management, that such proxy shall not exceed 5% of the eligible votes.

        July 2011

      • HC-7.2.6

        Votes must be cast by custodians or nominees in a manner agreed upon with the beneficial owner of the shares.

        July 2011

      • HC-7.2.7

        Impediments to cross border voting must be eliminated.

        July 2011

      • HC-7.2.8

        Processes and procedures for general meetings must allow for equitable treatment of all shareholders. Company procedures must not make it unduly difficult or expensive to cast votes.

        July 2011

    • HC-7.3 HC-7.3 Shareholders' Rights

      • HC-7.3.1

        The Corporate Governance framework of a company must protect and facilitate the exercise of shareholders' rights.

        July 2011

      • HC-7.3.2

        Basic shareholders rights include but are not limited to:

        (a) Secure methods of ownership registration;
        (b) The transfer of shares;
        (c) Obtaining relevant and material information on the corporation on a timely and regular basis;
        (d) Participating and voting in general shareholder meetings;
        (e) Electing and removing members of the board;
        (f) Sharing in the profits of the corporation;
        (g) Presentations by independent advisers; and
        (h) Participating in corporate events.
        July 2011

      • HC-7.3.3

        Shareholders must have the right to participate in, and to be sufficiently informed on decisions concerning fundamental corporate changes, such as:

        (a) Amendments to the statutes, or articles of incorporation or similar governing documents of the company;
        (b) The authorization and approval of additional or new shares or securities; and
        (c) Extraordinary transactions, including the transfer of all or substantially all assets that in effect result in the sale of the company, including but not limited to transactions falling under Module TMA.
        July 2011

    • HC-7.4 HC-7.4 Conduct of Shareholders' Meetings

      • HC-7.4.1

        The board must observe both the letter and the intent of the Commercial Companies Law's requirements for shareholder meetings. Among other things:

        (a) Notices of meetings must be honest, accurate and not misleading. They must clearly state and, where necessary, explain the nature of the business of the meeting;
        (b) Meetings must be held during normal business hours and at a place convenient for the greatest number of shareholders to attend;
        (c) Notices of meetings must encourage shareholders to attend shareholder meetings, and if not possible, to participate by proxy and refer to procedures for appointing a proxy and for directing the proxy how to vote on a particular resolution. The proxy agreement must list the agenda items and must specify the vote (such as "yes," "no" or "abstain");
        (d) Notices must ensure that all material information and documentation is provided to shareholders on each agenda item for any shareholder meeting, including but not limited to any recommendations or dissents of directors;
        (e) The board must propose a separate resolution at any meeting on each substantially separate issue, so that unrelated issues are not "bundled" together;
        (f) In meetings where directors are to be elected or removed the board must ensure that each person is voted on separately, so that the shareholders can evaluate each person individually;
        (g) The chairman of the meeting must encourage questions from shareholders, including questions regarding the company's corporate governance guidelines;
        (h) The minutes of the meeting must be made available to shareholders upon their request as soon as possible, but not later than 30 days after the meeting;
        (i) Disclosure of all material facts must be made to the shareholders by the Chairman prior to any vote by the shareholders;
        (j) Disclosure must be made of the attendance of the board of directors at board meetings, as well as committee meetings, on an individual basis, including the outcome and any decisions taken at such meetings, together with any objections or reservations raised item by item;
        (k) As shareholder meetings are public meetings, the board and senior management must permit on request for members of the media to attend and report on shareholder meetings of the company; and
        (l) Any commercial material or notices to stakeholders shall also be provided to shareholders, particularly in relation to topics to be discussed at annual general meetings.
        July 2011

      • HC-7.4.2

        The company should require all directors to attend and be available to answer questions from shareholders at any shareholder meeting and, in particular, ensure that the chairs of the audit, remuneration and nominating committees are ready to answer appropriate questions regarding matters within their committee's responsibility (it being understood that confidential and proprietary business information may be kept confidential).

        July 2011

      • HC-7.4.3

        The company should require its external auditor to attend the annual shareholders' meeting and be available to answer shareholders' questions concerning the conduct and conclusions of the audit.

        July 2011

      • HC-7.4.4

        A company should maintain a company website. The company should dedicate a specific section of its website to describing shareholders' rights to participate and vote at each shareholders meeting, and should post significant documents relating to meetings including the full text of notices and minutes. The company may also consider establishing an electronic means for shareholders' communications including appointment of proxies. For confidential information, the company should grant a controlled access to such information to its shareholders.

        July 2011

      • HC-7.4.5

        In notices of meetings at which directors are to be elected or removed, the company should ensure that:

        (a) Where the number of candidates exceeds the number of available seats, the notice of the meeting should explain the voting method by which the successful candidates will be selected and the method to be used for counting of votes; and
        (b) The notice of the meeting should present a factual and objective view of the candidates so that shareholders may make an informed decision on any appointment to the board.
        Amended: April 2013
        July 2011

    • HC-7.5 HC-7.5 Direct Shareholder Communication

      • HC-7.5.1

        The chairman of the board (and other directors as appropriate) must maintain continuing personal contact with major shareholders to solicit their views and understand their concerns. The chairman must ensure that the views of shareholders are communicated to the board as a whole. The chairman must discuss governance and strategy with major shareholders. Given the importance of market monitoring to enforce the "comply or explain" approach of this Module, the board should encourage investors, particularly institutional investors, to help in evaluating the company's corporate governance.

        Amended: January 2012
        July 2011

      • HC-7.5.2

        Institutional investors acting in a fiduciary capacity must disclose their overall corporate governance and voting policies with respect to their investments, including the procedures that they have in place for deciding on the use of their voting rights.

        July 2011

      • HC-7.5.3

        Institutional investors acting in a fiduciary capacity must disclose how they manage material conflicts of interest that may affect the exercise of key ownership rights regarding their investments.

        July 2011

    • HC-7.6 HC-7.6 Controlling Shareholders

      • HC-7.6.1

        In companies with one or more controlling shareholders, the chairman and other directors must actively encourage the controlling shareholders to make considered use of their position and to fully respect the rights of minority shareholders.

        July 2011