Special resolution on term of office of directors

As you might have aware, we had amended our statutes (Articles of Association) in an extraordinary general meeting held on 28th March 2015 to align with practices from MSF International, Company laws in HK and up-to-date institutional structure of MSF-HK). In the exercise, we changed the term of office of directors from 2 years to 3 years to align with the practice of International board. Therefore, the effective term of office for directors elected in 2015 AGM, according to the new statutes, is 3 years. However, we foresee that there will be no directors turnover (hence no board election) every 3 years starting from 2016 if we implement the new policy straight away. Having no director turnover in any year is not desirable situation in MSF as we would like to promote new ideas to be absorbing in the board every year and keeping up the governance power of the association members. 

After consulting the advice from our legal firm, we propose to pass a special resolution in the 2015 AGM that out of the 6 elected directors, the 3 directors who received the highest number of votes will hold office for 3 years while the remaining 3 directors have a term of 2 years. If there is an equality of votes, the directors concerned will draw lots amongst themselves to determine who will hold office for 3 years. If this special resolution is passed, there will be directors turnover in every year from 2015 onwards. 

An illustration below helps to explain the directors turnover scenario with the status quo (A) and the special arrangement (B). 

A. Keeping the status quo (no directors turnover in year 2016, 2019, 2022, 2025...)

B. Special arrangement for 2015 (directors turnover every year onwards) 

 

Text of the Special Resolution

IT IS RESOLVED THAT notwithstanding Article 81 of the Articles of Association of the Company (which prescribes that directors shall have a term of 3 years), and due to internal administrative reason, the following special arrangement will apply solely to the directors to be elected at the 2015 annual general meeting (“2015 AGM directors”):   

Amongst the 2015 AGM directors who are successfully elected to the office of directors at the 2015 annual general meeting, three of the 2015 AGM directors who received the highest number of votes will hold office for a term of three years and the remaining three 2015 AGM directors will hold office for a term of two years.  If there is an equality of votes received amongst the 2015 AGM directors, the 2015 AGM directors concerned will draw lots amongst themselves to determine who will hold office for three years.

 

The final document will be included in the formal AGM notification pack, together with information of the board candidates, proxy forms, etc, which will be circulated to members 21 days before the AGM.   

By: Jennifer Wong