Proxy voting at a general meeting: the rules to check

The short answer

A proxy lets a member who cannot attend be represented by someone who can. Whether proxies are allowed, who may hold one, what form it takes, when it must arrive and how many one person may hold are set by two layers: the law for your legal form, and your bylaws.

Some laws give every member a right to appoint a proxy, and your bylaws cannot take it away. Others allow proxies only if the bylaws say so. Before the meeting, work through six questions: is it allowed, who can hold it, what form, by when, how many, and how is it revoked.

What goes wrong when proxies are handled informally is the subject of our article Proxy Voting: Europe’s Most Ignored Compliance Risk.

In this article, “bylaws” means your governing document, whatever it is called: bylaws, articles of association or statutes.

1. Is a proxy allowed at all?

Start here, because the default differs by legal form.

• A right for every shareholder. In EU companies whose shares are traded on a regulated market, every shareholder has the right to appoint any other natural or legal person as a proxy holder to attend and vote in their name (Directive 2007/36/EC, Article 10). The Danish Companies Act gives shareholders in every A/S and ApS the right to attend the general meeting by proxy (selskabsloven § 80, stk. 1). In the UK, a member of a company may appoint another person as proxy to attend, speak and vote (Companies Act 2006, s. 324).
• Not allowed unless the bylaws say so. For a German registered association, the exercise of membership rights cannot be left to another person (BGB § 38), unless the statutes provide otherwise (BGB § 40). An association there that wants proxy voting has to write it into its statutes.

If your bylaws say nothing and you are unsure which default applies, find out before you accept the first proxy.

2. Who can hold a proxy?

Rules on who may act as proxy range from “anyone” to a short list.

• Anyone. Under the Shareholder Rights Directive, the proxy holder can be any natural or legal person (Article 10). The Danish Companies Act gives the right to attend by proxy without saying who the proxy must be (§ 80).
• A defined circle.The Danish standard bylaws for owners’ associations (ejerforeninger) let a vote be cast by the owner’s spouse or cohabitant, or by an adult or the association’s board holding a written proxy (BEK nr. 1738 of 2020, Annex 1, § 12). The ministry’s advisory model bylaws for Danish housing co-operatives allow a proxy only to the member’s spouse or registered partner, an adult member of the household, or another member (model bylaws of 27 December 2006, § 22, stk. 5).

Where the circle is defined, check each proxy holder against it before the meeting.

3. What form must the proxy take?

Many rules require the proxy to be written. Under the Danish Companies Act, the proxy holder must present a written and dated proxy (§ 80, stk. 1), and shareholders can appoint a proxy and revoke it electronically (§ 80, stk. 2). Danish ejerforeninger require a written proxy where an adult or the board votes for an owner (§ 12).

For companies with shares traded on a regulated market, the Danish Act also limits how much the company can demand: appointing a proxy, notifying the company and giving voting instructions may be subject only to the formal requirements needed to identify the shareholder and the proxy, and only in proportion to that aim (§ 80, stk. 4).

Keep the proxy document with your meeting records. It is your evidence that the person who voted was entitled to.

4. By when must it arrive?

Bylaws often set a deadline for proxies, and some laws cap how early it can be. In the UK, a provision in a company’s articles is void if it requires a proxy appointment to be received more than 48 hours before the meeting, not counting any part of a day that is not a working day (Companies Act 2006, s. 327).

If your bylaws set a deadline, apply it the same way to every proxy, and record when each one arrived.

5. How many proxies may one person hold?

Some rules cap this; others leave it to the bylaws.

• In a Danish ejerforening under the standard bylaws, an owner can cast only one vote per ballot under a proxy from another owner (§ 12).
• Under the advisory model bylaws for housing co-operatives, a member can cast only one vote under a proxy (§ 22, stk. 5).
• The Directive lets member states limit the number of proxy holders a shareholder may appoint for one meeting (Article 10(2)).

A cap like this stops a few people collecting enough proxies to decide the meeting. If your bylaws set one, check it as each proxy is registered, not at the vote.

6. Instructions, split votes and revocation

• Instructions. A proxy can carry instructions on how to vote. Under the Directive, member states may restrict proxy voting without specific instructions only to deal with conflicts of interest, such as a proxy holder who sits on the board (Article 10(3)).
• Split votes. A Danish proxy holder who holds proxies from several shareholders can vote differently for each of them (§ 80, stk. 3).
• Revocation. Under the Danish Companies Act, a proxy must be revocable at any time. Revocation must be in writing and can be sent to the company (§ 80, stk. 2).

Proxies and quorum

Whether a represented member counts towards your quorum depends on the wording. “Members present” and “members present or represented” are different tests. Our article on how many is a quorum at a general meeting covers how to read your rule.

Where Assembley fits

In Assembley, you record each proxy: the member giving it, the member holding it, and a note. Assembley enforces proxy limits where you configure them. The law and your bylaws decide who may hold a proxy and in what form; Assembley records the result.

Checklist

• We know whether our law gives members a right to a proxy, or whether our bylaws must allow it.
• We know who may hold a proxy, and check each holder against that.
• We know the required form, and keep each proxy document.
• We know the deadline, and record when each proxy arrived.
• We know any cap on proxies per holder.
• We know how a proxy is revoked, and record revocations.
• We know whether represented members count towards our quorum.