Voting Methods and Resolutions

A meeting exists, ultimately, to arrive at a decision. That decision is expressed in the form of a resolution, and the resolution is arrived at through one of several recognised voting methods.

Methods of Voting

Show of hands. Unless a poll is demanded, or e-voting is mandatorily required, voting at a general meeting is ordinarily first taken by a show of hands, in which every member personally present (holding one or more shares) has exactly one vote, regardless of how many shares they hold. It is a quick, informal method, but it does not reflect the true weight of shareholding behind a decision.

Poll. Any member, or the chairman, may demand a poll (Section 109) either before, or on the declaration of the result of, a vote by show of hands, on any resolution (other than certain procedural resolutions, such as the election of the chairman or an adjournment, where restrictions apply). On a poll, votes are counted according to the actual voting rights of each member — ordinarily in proportion to their shareholding — giving a far more accurate reflection of majority opinion by value than a show of hands.

Postal ballot. Under Section 110, certain specified classes of resolutions (and any resolution a company chooses, other than ordinary business items and business requiring a physical presence, such as items to be discussed at a meeting with auditors present) must be passed only by postal ballot — members vote by post or through an electronic system, without needing to attend a meeting in person.

Electronic voting (e-voting). Section 108, read with the rules made under it, requires every listed company and every company having not less than 1,000 shareholders to provide its members the facility to vote by electronic means on resolutions transacted at a general meeting, in addition to voting at the venue itself. E-voting widens participation, particularly for shareholders who are geographically dispersed.

Resolutions — Section 114

A proposal placed before a meeting becomes a binding decision only once it is passed as a resolution. Section 114 recognises two kinds of resolutions:

Ordinary Resolution — Section 114(1). A resolution is an ordinary resolution when it is passed by a simple majority — that is, the votes cast in favour (by members entitled to vote, whether by show of hands, electronically, or on a poll) are more than the votes cast against it. Most routine business, including the ordinary business of an AGM, is transacted by ordinary resolution. …