Question 1

Managing Agents

Accepted Answer

Q: We recently appointed agents. There are five directors from a block of 15 residents. We held a board meeting with the MD from the agents present. We agreed with him a date for another board meeting, with notification of the agenda 7-10 days in advance which the board would produce. For some unknown reason, he issued an agenda to the residents which he had put together. My understanding is that the board would produce the agenda but not circulate to all the residents. This is what he replied when I queried his action: “We normally issue agendas for formal Directors’ meetings in accordance with the Memo & Arts of Association of the company. This is usually a minimum of 14 days before a meeting unless otherwise specifically stated in the Memo & Arts. It’s always a good idea to have formal notice convening a meeting as if these are not regularly convened, any decisions or discussions may not be binding in law. I appreciate that at your estate there is an unusually high level of co-operation and sophistication with residents, but this is not always the case on other estates. You and Barbara may also wish to consider the possibility of issuing copy Minutes of Directors’ meetings to all residents as this can serve not only as a source of information but as a form of newsletter. This is not of course obligatory but it is a useful way to keep people informed of matters.” We hold an AGM once a year and a secondary meeting with residents every six months and we publish the notes on the meetings. The board do not want to issue board meeting agenda’s or notes of all its meeting, which are usually six-eight per annum. What is your view? FPRA Committee Member Shaun O’Sullivan: Although I am unsighted on your Articles of Association and the precise details of the arrangement you have with the agents, there are a number of factors which you might wish to consider. Whether Board Meetings (otherwise known as Directors’ Meetings) are actually required, or whether you have chosen to hold then anyway, will be determined by your Articles of Association. On the premise that you are a relatively new RTM Company, that you are a company limited by guarantee, and on the assumption that your Articles are broadly in line with the model articles borne out the 2006 Companies Act, there is considerable flexibility as to the convening of such meetings. However if such meetings are called, my understanding is that a record of the decisions has to be retained for at least 10 years. It is also my understanding that, although the directors are responsible under the general authority vested in them to manage the company’s business, under the terms of these articles members may, by special resolution, direct the directors to take, or refrain, from taking specified action. Arguably, therefore, members should be made a aware of the decisions of the board; this, can, as inferred by the agents, be achieved by various means, but one would be to issue the agenda and minutes of board meetings to members. It’s perhaps also worth bearing in mind that the agents, as a professional agency, probably has a large portfolio of managed properties; my guess is that the competence of their clients - some of which will be RTM companies such as yourselves - will vary hugely. Some will, to use the agents’ words in alluding to your company, be ‘co-operative and sophisticated’ whereas others will either be completely uncommunicative - and some might include directors who will be hell bent on making inappropriate / undemocratic decisions! Equally directors of RTM companies come and go and it’s often, in my experience, difficult to find replacement directors with the same level of competence and engagement as would appear to be the case with your current board. With this in mind, therefore, and to protect the interests of their clients as well as themselves, I think the stance adopted by the agents is both prudent and understandable. They give the impression of being a pretty astute agent! All that said, it is evident that your current arrangements, of holding residents’ meetings every 6 months and publishing the notes of such meetings, has served you well and certainly would seem to meet the need to keep members abreast of company business. However, being able to achieve such active participation by residents is, in my experience (and probably that of Metro-PM!), really quite unusual. Without knowing your precise circumstances my inclination would to accept Metro-PM’s 'template’ at this stage, for the directors to introduce, under AOB, any burning issues which Metro-PM might have missed and to see how things develop and perhaps, as the result of this, reconsider the need for the secondary 6 monthly meetings.’ [Submitted October 2016]

Question 2

Managing Agents

Accepted Answer

Q: We recently appointed agents. There are five directors from a block of 15 residents. We held a board meeting with the MD from the agents present. We agreed with him a date for another board meeting, with notification of the agenda 7-10 days in advance which the board would produce. For some unknown reason, he issued an agenda to the residents which he had put together. My understanding is that the board would produce the agenda but not circulate to all the residents. This is what he replied when I queried his action: “We normally issue agendas for formal Directors’ meetings in accordance with the Memo & Arts of Association of the company. This is usually a minimum of 14 days before a meeting unless otherwise specifically stated in the Memo & Arts. It’s always a good idea to have formal notice convening a meeting as if these are not regularly convened, any decisions or discussions may not be binding in law. I appreciate that at your estate there is an unusually high level of co-operation and sophistication with residents, but this is not always the case on other estates. You and Barbara may also wish to consider the possibility of issuing copy Minutes of Directors’ meetings to all residents as this can serve not only as a source of information but as a form of newsletter. This is not of course obligatory but it is a useful way to keep people informed of matters.” We hold an AGM once a year and a secondary meeting with residents every six months and we publish the notes on the meetings. The board do not want to issue board meeting agenda’s or notes of all its meeting, which are usually six-eight per annum. What is your view? FPRA Committee Member Shaun O’Sullivan: Although I am unsighted on your Articles of Association and the precise details of the arrangement you have with the agents, there are a number of factors which you might wish to consider. Whether Board Meetings (otherwise known as Directors’ Meetings) are actually required, or whether you have chosen to hold then anyway, will be determined by your Articles of Association. On the premise that you are a relatively new RTM Company, that you are a company limited by guarantee, and on the assumption that your Articles are broadly in line with the model articles borne out the 2006 Companies Act, there is considerable flexibility as to the convening of such meetings. However if such meetings are called, my understanding is that a record of the decisions has to be retained for at least 10 years. It is also my understanding that, although the directors are responsible under the general authority vested in them to manage the company’s business, under the terms of these articles members may, by special resolution, direct the directors to take, or refrain, from taking specified action. Arguably, therefore, members should be made a aware of the decisions of the board; this, can, as inferred by the agents, be achieved by various means, but one would be to issue the agenda and minutes of board meetings to members. It’s perhaps also worth bearing in mind that the agents, as a professional agency, probably has a large portfolio of managed properties; my guess is that the competence of their clients - some of which will be RTM companies such as yourselves - will vary hugely. Some will, to use the agents’ words in alluding to your company, be ‘co-operative and sophisticated’ whereas others will either be completely uncommunicative - and some might include directors who will be hell bent on making inappropriate / undemocratic decisions! Equally directors of RTM companies come and go and it’s often, in my experience, difficult to find replacement directors with the same level of competence and engagement as would appear to be the case with your current board. With this in mind, therefore, and to protect the interests of their clients as well as themselves, I think the stance adopted by the agents is both prudent and understandable. They give the impression of being a pretty astute agent! All that said, it is evident that your current arrangements, of holding residents’ meetings every 6 months and publishing the notes of such meetings, has served you well and certainly would seem to meet the need to keep members abreast of company business. However, being able to achieve such active participation by residents is, in my experience (and probably that of Metro-PM!), really quite unusual. Without knowing your precise circumstances my inclination would to accept Metro-PM’s 'template’ at this stage, for the directors to introduce, under AOB, any burning issues which Metro-PM might have missed and to see how things develop and perhaps, as the result of this, reconsider the need for the secondary 6 monthly meetings.’ [Submitted October 2016]

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