Notice of Annual General Meeting 2008
Amendment of New Articles of Association at a later date
16. Subject to the passing of Resolution 15 set out in the Notice convening the AGM of which this Resolution forms part, and with effect on and from 1 October 2008 or such later date as Section 175 of the Companies Act 2006 (‘CA 2006’) shall be brought into force, to delete Articles 116 to 118 of the New Articles in their entirety and substitute in their place Articles 116 to 121 as set out in the document produced to the meeting and for the purpose of identification marked ‘B’ and signed by the Chairman of the meeting and to renumber the remaining Articles and update cross-references.
Explanatory note: Further revisions to the New Articles are proposed to cater for CA 2006 changes to Directors’ conflicts of interest which are expected to come into force on 1 October 2008. Principal changes to the New Articles are summarised below.
- Directors’ interests: CA 2006 sets out directors’ general duties.
The provisions largely codify the existing law, but with some changes. Under CA 2006, a Director must avoid a situation where he has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the company’s interests. The requirement is very broad and could apply, for example, if a Director becomes a director of another company or a trustee of another organisation. CA 2006 allows directors of public companies to authorise conflicts and potential conflicts where appropriate and where the Articles of Association contain a provision to this effect. CA 2006 also allows the Articles of Association to contain other provisions for dealing with directors’ conflicts of interest to avoid
a breach of duty. The New Articles as proposed to be revised with effect on and from 1 October 2008 or such time as the relevant provisions come into force, give the Directors authority to approve such situations and to include other provisions to allow conflicts of interest to be dealt with in a similar way to the current position.
Safeguards which will apply when Directors decide whether to authorise a conflict or potential conflict include: (a) only independent Directors (i.e. those who have no interest in the matter being considered) will be able to take the relevant decision; and (b) in taking the decision, Directors must act in a way they consider, in good faith, will be most likely to promote the Company’s success. Directors will be able to impose limits or conditions when giving authorisation or subsequently, if they think this is appropriate.
Provisions are proposed relating to confidential information, attendance at Board meetings and availability of Board papers to protect a Director being in breach of duty if a conflict of interest or potential conflict of interest arises. They will only apply where the situation giving rise to the potential conflict has previously been authorised by the Directors. It is the Board’s intention to report annually on the Company’s procedures for ensuring that the Board’s powers to authorise conflicts are operated effectively and that procedures have been followed.
A copy of the revised New Articles and a copy of the New Articles marked to show changes being proposed by this Resolution are available for inspection.
Due to the phased nature of implementation of CA 2006, further changes to the Articles of Association are likely to be proposed at a later AGM.