An annual general meeting (AGM) is a meeting of members or shareholders, and its usual function is to elect the board, hear the reports on the activities and plans of the organisation, and view the annual financial statements (AFS).
The AGM is a fundamental part of the governance routine allowing the members a regular opportunity to receive information, and to exercise their basic function of holding the board to account and electing board members.
(a trust or a no-members non-profit company (NPC)), an AGM is not required, as the board has no-one to report to. For no members NPCs and trusts, the annual functions of approving the AFS and selecting new board members to replace those whose terms of office have come to an end will take place at a board meeting. (When lodging NPO reports for these organisations, you can say ‘no AGM required as no members’).
A voluntary association has to have members in order to exist as a legal structure. An AGM is certainly required.
The provisions of new Companies Act are somewhat confusing as:
Our view is that the requirement that the AFS be presented at an AGM effectively does make the AGM mandatory for all companies with members or shareholders.
Also, for NPCs with members, the members should be gathered together (in a room or virtually) at least once a year to play their basic role of holding the directors to account. If this annual routine is not followed, then the board is in danger of forgetting who the members are, and the members themselves might think that their services are no longer required. If it is worth having members, then one needs to keep them up to date and engaged. We too often see organisations which have neglected to follow the membership routines and the members fall into disarray and cannot play their role when they are needed.