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Make provision for each public company to establish a shareholders’ |
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committee; to make provision about the membership, functions and operation |
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of the committee; and for connected purposes. |
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Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and |
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consent of the Lords Spiritual and Temporal, and Commons, in this present |
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Parliament assembled, and by the authority of the same, as follows:— |
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1 | Establishment of a shareholders’ committee |
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(1) | The Companies Act 2006 (c. 46) shall be amended as follows. |
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(2) | After Part 10 insert— |
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259A | Shareholders’ Committee |
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(1) | Every public company shall, at each general meeting of the company at |
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which accounts are laid in accordance with section 437 (public |
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companies: laying of accounts and reports before general meeting), |
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appoint a Shareholders’ Committee (to be known as a “Shareholders’ |
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Committee”) of not more than six and not fewer than three persons to |
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hold office until the conclusion of the next general meeting at which the |
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requirements of section 437 are complied with, unless the private |
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shareholders vote at the general meeting not to have such a committee |
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appointed until the next such meeting. |
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(2) | The Shareholders’ Committee shall be constituted subject to the |
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provisions of this section in accordance with Schedule 5A of this Act. |
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(3) | The function of the committee is to encourage and enable regular, |
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systematic and, where necessary, urgent communication and |
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consultation on a confidential basis between the directors and the |
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members of the company on matters of concern to them as members. |
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(4) | The Shareholders’ Committee shall be elected as to secure adequate |
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and independent representation for members generally and for private |
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shareholders in particular, and the members of the committee shall be |
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nominated for election and elected solely by other private shareholders |
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and not by the directors, or by persons on their behalf or connected |
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(5) | Elections under subsection (4) shall be held in accordance with any |
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guidance that the Secretary of State may issue. |
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(6) | For the purposes of this section “private shareholder” means a |
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shareholder who is the beneficial owner of the shares registered in his |
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name, and this shall be taken to include investors whose shares are held |
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by another person on their behalf, and any member who holds shares |
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on behalf of another person shall, on the request of that person, confirm |
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to the company the beneficial interest of that person in writing. |
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(7) | The directors shall nominate a director or directors to attend but not |
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vote at meetings of the Shareholders’ Committee. |
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(8) | The director or directors nominated under subsection (7) shall, as soon |
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as practicable, transmit reports (including minority reports) prepared |
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by or on behalf of the Shareholders’ Committee, to the directors. |
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(9) | The auditors, accountant, the secretary (or where applicable, joint |
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secretaries) and the solicitor to the company, individually or jointly, |
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shall forthwith refer to the Shareholders’ Committee any matter of |
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which they became aware in that capacity which is a breach, or a |
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wilfully intended breach, of the criminal law, of obligations under |
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legislation, including this Act, or of fiduciary relationships owed to the |
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company or to its members being a matter of concern to members of the |
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(10) | The company shall make available to the Shareholders’ Committee the |
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means to communicate with shareholders on relevant matters with the |
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same regularity and on the same basis as the directors. |
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(11) | The company shall provide, upon request by the Shareholders’ |
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Committee, its company secretary, or a suitably qualified substitute, to |
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act as secretary to the committee. |
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(12) | The company shall the cost of reasonable administrative expenses |
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incurred by the Shareholders’ Committee.” |
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(3) | In section 416 (contents of directors’ report: general) after subsection (3) |
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“(4) | The report must include reference to matters arising from time to time |
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in and in connection with the Shareholders’ Committee.” |
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(4) | After Schedule 5 insert the following Schedule— |
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Proceedings of Shareholders’ Committee |
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1 | The committee shall meet at such times as it may from time to time |
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appoint and, failing such appointment, at least once a quarter; and |
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any member of the committee may also call a meeting of the |
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committee as and when he thinks necessary. |
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2 | The committee may act by a majority of its members present at a |
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meeting, but shall not act unless a majority of the committee are |
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present and the committee shall elect a chairman from among its |
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3 | A member of the committee may resign by notice in writing signed |
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by him and delivered to the secretary of the company. |
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4 | If a member of the committee becomes bankrupt or compounds or |
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arranges with his creditors or is absent from five consecutive |
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meetings of the committee without leave of the committee his office |
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thereupon becomes vacant. |
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5 (1) | On a vacancy occurring in the committee the secretary of the |
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company shall forthwith summon a meeting of the committee to fill |
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the vacancy; and the meeting may, by resolution, appoint another |
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member to fill the vacancy until the next meeting under section |
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(2) | The continuing members of the committee, if not fewer than two, |
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may act notwithstanding any vacancy in the committee.” |
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2 | Citation and commencement |
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(1) | This Act may be cited as the Protection of Shareholders Act 2009. |
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(2) | This Act shall come into force six months after the date on which it is passed. |
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Protection of Shareholders Bill |
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To Make provision for each public company to establish a shareholders’ |
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committee; to make provision about the membership, functions and operation |
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of the committee; and for connected purposes. |
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| | | | | | | | | | | | Ordered, by The House of Commons, |
| | | | | to be Printed, 17 March 2009. |
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© Parliamentary copyright House of Commons 2009
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Applications for reproduction should be made in writing to the Information Policy Team,
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Office of Public Sector Information, Kew, Richmond, Surrey TW9 4DU
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PUBLISHED BY AUTHORITY OF THE House of Commons
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LONDON — THE STATIONERY OFFICE LIMITED
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Printed in the United Kingdom by
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The Stationery Office Limited
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