Voting by mail by shareholders at the general meeting of a public joint-stock company
Shareholders of a public company can take part in the general meeting of shareholders personally at the location where the meeting is held, via electronic communications, or by mail balloting. What is mail balloting, and why is this method of voting at general meetings so rarely used in public companies?
Shareholders of a public company in Poland can exercise their right to vote by mail (korespondencyjnie) only if this possibility is provided for in the bylaws of the general meeting. To conduct such voting, the public company must post on its website the draft resolutions and the ballots for voting, if they were not distributed directly to all of the shareholders.
Under the regulations, the ballot form provided to shareholders must include the text of the proposed resolution and also:
- Enable identification of the shareholder, and the proxy if appointed
- Include an indication of whether the vote is “in favour,” “opposed,” or “abstain”
- Enable assertion of an objection by shareholders voting against a resolution
- Include instructions on the manner of voting on each resolution the proxy is to vote on.
A vote made in a form or content other than on the ballot form published by the company is invalid.
In calculating the quorum and the results of the voting, ballots submitted by mail will be included if the company received them no later than the time when voting is ordered at the general meeting. Ballots submitted by mail are deemed open and disclosed from the time the results of the voting are announced. This does not pose a problem for mail-in voting on resolutions voted on by secret ballot, because—according to the legal literature—persons voting by mail waive the right to secrecy of their ballot. However, the bylaws of the general meeting may limit the scope of resolutions which can be voted on by mail, e.g. by not allowing this voting procedure for resolutions that must be voted on by secret ballot.
The Commercial Companies Code does not impose any restrictions on voting by mail at the ordinary (annual) general meeting or extraordinary general meeting, so long as the bylaws of the general meeting do not contain any exclusions on the types of resolutions which can be voted on by mail.
A shareholder voting by mail also has the right to assert an objection to the wording of the resolution being voted on. Such an objection will have the same effect as a demand entered in the minutes asserted by a shareholder present at the general meeting, and likewise entitles the shareholder to challenge the resolution of the general meeting.
Voting by mail does not exclude the shareholder’s right to participate in person at the general meeting. Shareholders who vote by mail can still show up physically at the general meeting, but cannot vote on resolutions which they have already voted on by mail. A shareholder who has voted on resolutions by mail and then participates in person at the general meeting can submit a statement to the company withdrawing their mail-in ballot, however, so long as the statement reaches the company no later than the time when voting is ordered at the general meeting.
If the general meeting votes to amend the wording of a resolution which a shareholder has already voted on by mail, and the shareholder is present in person at the general meeting, the shareholder can vote in person on the reworded resolution. The ballot submitted by the shareholder by mail will not be counted, as the mail-in ballot concerned a different wording of the resolution.
Because of these restrictions on voting, and the risk that a ballot will not be counted because the wording of the resolution is subsequently amended, voting by mail-in ballot is not a popular or commonly used method of voting on resolutions of the general meeting of public companies in Poland.
Grzegorz Wojnar, M&A and Corporate practice, Wardyński & Partners
