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Companies Bill [Lords]

Amendment No. 355 raises a difficult point that we have considered in correspondence with the Law Society, as hon. Members know. The procedure for written resolutions in the Bill is very different from that of the 1985 Act. Unanimity is no longer required. This is a very significant measure of deregulation. However, because unanimity is not required, certain procedural safeguards are not needed in the context of unanimous procedures. The argument behind the amendment is that companies with written resolution procedures in their articles, whether public or private, should be able to evade those procedural requirements, if the articles require unanimity. That is superficially attractive, but we believe that it is wrong in principle. First, for a number of resolutions in the Bill, there is a particular procedure to be followed, and we do not want those procedures to be avoided because of provisions that companies may have in their articles. Secondly, for public companies certain decisions need to be taken in a meeting rather than by written resolution, because of the second company law directive. In essence, the amendment is about avoiding statutory procedural requirements, but we do not think that the procedural requirements imposed by the written resolution clauses are onerous. There is nothing in the Bill that stops non-statutory resolutions from being passed in whatever way the articles envisage. If the articles require members’ agreement, there is no need to comply with the statutory procedures. My hon. Friend the Member for Great Grimsby has discussed amendment No. 682. I hope that he has picked up that the Bill includes a range of clauses to strengthen shareholder engagement. Indeed, I expect that we will debate institutional shareholder voting tomorrow. However, amendment No. 682 is not right, because it would prevent a director from acting as a proxy. In an ideal world, we might wish that all shareholders would attend general meetings, but that will not always happen. If shareholders want to appoint somebody in their stead, be it a director to act as a proxy or be it somebody else, they should be free to appoint somebody to represent them and to vote on their behalf. It is better for them to have a say in a particular thing rather than not including that power in the Bill. My hon. Friend’s amendment would make it more difficult for members to exercise their votes.