Voting by proxy

A look at the role and limitations of a proxy.

A PROXY allows a person who is entitled to attend and vote at a meeting, to appoint another person to attend the meeting and vote on his behalf.

According to the Oxford Advanced Learners Dictionary, the word “proxy” means the authority given by one person to another to do something for him when he cannot do it himself. The word “proxy” also refers to a person who has been given authority to represent someone else. The subject of proxy votes most frequently arises in the context of meetings of companies and societies. However, there is no common law right to a proxy. Such a right only exists where it is provided by law or contractually agreed to.

Whilst the subject of proxies is relevant in the context of meetings, it is more likely to impact upon meetings of companies and societies. Companies are entities where traditionally individuals associate for the objective of making profits for themselves. Their activities are regulated by the Companies Act 1965. Societies are usually associations of seven or more like-minded persons who come together in pursuit of some common interest.

Companies

In the case of the Companies Act 1965, there is a statutorily provided right for a member of a company to appoint another person to attend company meetings as a proxy. Such a person can have the same rights as a member at the meeting. This right is restricted to the proxy voting in a poll (he must be a member), an approved company auditor or a person approved by the Registrar in any particular case. It is permissible for the company to frame its Articles of Association to have provisions which either restrict the rights of the proxy holder when attending the meeting or put him almost in the same position as a shareholder.

A proxy is appointed by an instrument in writing, in accordance with the articles. There are two forms of proxy: a general proxy which appoints a person to vote as he thinks fit, having regard to what is said at the meeting, and a special proxy appointing a person only to vote for or against a particular resolution.

The Companies Act 1965 requires that when notices are sent out calling for a meeting, the notice must state the right of the member to appoint a proxy. To what extent the proxy can then act has been discussed earlier.

Societies

When it comes to societies, there are no provisions in the Societies Act 1966 for the appointment of a proxy to attend and vote at meetings.

As stated earlier there is no common law right to vote by proxy. In the case of societies, such a right to appoint a proxy and the extent to which the proxy holder can act would need to be provided for in the constitution, which is the contract between the society and the members, and the members inter se.

The constitution of the society is a document created and adopted by its members. It is also a document endorsed and registered with the Registrar of Societies. If the members have not chosen to give themselves such a right, then it does not exist.

In some cases the constitution of a society may say that a member can only vote at a meeting if he is present. Some organisations may impose additional conditions to allow members who are personally present to vote. But whatever the situation, such a clause would make it clear beyond doubt that there can be no proxy voting.

Committee meetings

Another aspect to consider is whether proxies can be given by an absent committee member to another to make decisions at committee meetings.

“Committee” here refers to a group of persons elected by the members of an organisation at a general meeting, to manage the organisation. Such a committee may in different situations and organisations be referred to as a board of directors or a council. Its role is to administer the organisation and execute its policies.

Whether decisions can be made at such committees through voting done in part by proxies, depends on the constitution. If this is not provided for, then no proxy can be given and it would be wrong to rely on it.

If the provisions of the Companies Act 1965 are carefully looked at, it will be noted that the power of giving proxies is for voting at the meeting of members only and not at the board level. There is no such thing as proxies at board meetings.

I am inclined to take the view that there cannot be proxy voting at committee meetings. This is because of the different nature and purpose of a general meeting compared to a committee meeting. Different considerations are involved here.

At a meeting of members which is a general meeting, the member is voting for himself. He can decide which way he is going to vote even before attending the meeting or listening to what is being said. This is reflected in the format of the proxy form where he can direct the proxy to vote for or against a resolution. A committee member’s role is different. Committee members are chosen by the general body to act in the best interest of the organisation. Such a member has to cast his vote in the interest of the society, instead of personal interest.

This he does by taking part in the deliberations of the committee at its meeting, considering contrary views expressed during the meeting and then casting his vote. A person who gives a proxy would not in such a situation be meeting the requirement of making an objective judgment with regard to the matter being considered.

Thus if a proxy were allowed, it would mean that the person giving the proxy pre-directs the voting by doing so without proper consideration. If he leaves it to the person to whom the proxy is given, then he is delegating his responsibility to someone else. This is not what he was elected to do.

Using a proxy in such circumstances in the absence of a specific would be tantamount to abdication of responsibility. How then, it may be asked, can the absent member’s vote be brought into consideration? The way out is to provide for the appointment of an alternate.

If a particular member cannot attend, the alternate member can attend and participate in making the decision. This is common in board of directors’ meetings where alternate directors are often appointed. And this is also an option for societies.

Written by : Bhag Singh