The government is planning to add a provision in the Companies Act allowing minority shareholders to raise agenda items at AGMs
In a bid to strengthen minority shareholders, the government is planning to add a provision in the Companies Act allowing them to raise agenda items at annual general meetings (AGMs) of companies.
Until now, only the board of directors has been able to raise agenda items at AGMs.
The Parliamentary Standing Committee on Ministry of Commerce, at its meeting on Tuesday, recommended placing the Companies (second amendment) Bill 2020 in the parliament.
The amendment includes allowing owners of 5% shares at companies to raise their preferred agenda at AGMs.
"That, if finalised, would bring at least some positive changes towards protecting minority investors' rights in companies. But we have a long way to go to ensure the accountability of corporate boards and management," said corporate governance expert Mohammad Sanaullah, a founding member and former president of The Institute of Chartered Secretaries of Bangladesh.
Currently, owners of 10% or more shares can demand shareholders' voting at general meetings on any agenda item they feel is important for them.
Praising the new addition, Sanaullah said, minority shareholders with some sort of eligibility, in terms of their stake, will be allowed to participate in the general meeting agenda preparation process. However, they must face a vote to get their agenda item passed.