ANNUAL GENERAL MEETINGS & GOOD CORPORATE GOVERNANCE
By Adrian, Compliance and Governance Officer at Corpus Globe Corporate Solutions (CGCSo)
Section 57(3) of the Companies Act No. 10 of 2017 allows private companies to dispense with the holding of Annual General Meetings (AGMs), other than the first financial year if all members agree in writing, but overreliance on this provision risks undermining good corporate governance.
AGMs are important for transparency, accountability, and are a statutory platform for members to discuss with the board and auditors matters pertinent to the success of a company.
An AGM provides a mechanism for guidance and direction rather than control. It gives the board of directors and management direction not to derail from the interest and objectives upon which the company was established.
Without holding AGMs, companies may lack necessary oversight, exposing stakeholders such as creditors, employees, and communities to potential risks. While the law sets minimum requirements and penalty for breach, strong corporate governance ensures ethical conduct, accountability, and long-term sustainability. Members should therefore exercise caution in applying section 57(3), using it only when absolutely necessary. Good governance helps companies build trust with stakeholders, manage risks effectively, and ensure long-term sustainability beyond mere legal compliance.
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