Introduction
Proxies are instruments executed by voting members of a company in favor of another person, enabling that person to exercise the member’s voting rights. Any member of a company who is entitled to attend and vote at meetings of the company may appoint another person, whether a member or not, as his proxy to attend and vote instead of him. Proxies, a vital component of corporate governance, empower members of a company to delegate their voting rights to another individual.
This practice is especially pertinent in organizations like the Sierra Leone Bar Association (SLBA), operating under the framework of a company limited by guarantee. The ruling of the Steven J.A. sitting in the High Court on the issue of proxy, which does not materially examine the law and circumstances relative to the issue of proxy, has been reviewed. Examining the legal landscape governing proxies within this context unveils complexities and nuances that require careful consideration.
The Legal Framework: Articles of Association
The SLBA was established as a company not having shares or a company limited by Guarantee under Cap 249, and it operates within the confines of its Articles of Association. The Articles delineate internal regulations governing member-company relationships, encompassing meeting conduct, voting protocols, directorial appointments, and dividend declarations.
Article 1 of the Association’s Articles stipulates adherence to the rules contained in Table C of the Companies Act Chapter 249 of the Laws of Sierra Leone 1960, thereby establishing foundational legal parameters. Notably, Table C governs companies lacking a share capital, aligning with the Association’s structure. Rules 20-27 within Table C, explicitly addressing ‘Votes of Members,’ assume significance within this framework.
Proxies: Rules and Regulations
As per the Articles of Association of the company, essentially clause 1, its Preliminary provides as follows:
“Subject as hereinafter provided by the Rules contained in Table C of the first schedule of the Companies Act Chapter 249 of the Laws of Sierra Leone 1960 shall apply.”
From the above, it is evident that Table C of Cap 249 is a part of the Articles of Association of SLBA.
Rules 20-27 of Table C, which deals with the ‘Votes of Members,’ apply to the company.
Rule 23 of Table C expressly permits voting by proxy, affirming the legitimacy of such delegation within the Association’s proceedings. Rule 24 mandates written proxy instruments, specifying requisite formalities for appointment. Furthermore, Rule 25 outlines procedural requirements for proxy submission, emphasizing the necessity of compliance with timeframes to ensure validity.
Rule 23 provides
“On a poll, votes may be given either personally or by proxy.“
Rules 24 provides:
“The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing or, if the appointor is a corporation, either under seal, or under the hand of an officer or attorney so authorised. A proxy need not be a member of the company.”
Rules 25 provides:
“The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed, or a notarially certified copy of that power or authority shall be deposited at the registered office of the company not less than seventy-two hours before the time for holding the meeting or adjourned meeting at which the person named in the instrument proposes to vote, and in default the instrument of proxy shall not be treated as valid.”
With regard to the aforementioned Articles, it is explicitly clear that voting by members of the SLBA can be done personally or by proxy.
This represented the state of affairs before the enactment of the Companies Act No.5 of 2009 (as amended). Relative Cap. 249’s repeal and documents emanating therefrom, the Companies Act 2009, section 531 (2) and (4) are important regarding the status of or answering the question of what becomes of the SLBA’s Articles of Association, Section 531 (2) and (4) stipulate as follows:
531 (2) Notwithstanding the repeal, all companies incorporated or registered under the Companies Act, shall be deemed to be incorporated and registered under this Act and shall, within 6 months after the commencement of this Act apply to the Commission for a certificate of registration, which shall, without payment of any fee, give to such a company a certificate in the manner provided under this Act.
…
(4) Any act done, executed or issued under the repealed Act and in force or operative before the commencement of this Act shall, so far as it could have been done, executed or issued under this Act have effect as if done, executed or issued under this Act. [Emphasis added].
Based on the above, the following questions could be posed –
- Was the act of permitting, providing for the nomination by a member of a proxy, provided for under Cap 249? The answer is affirmative; proxy voting was provided in the incorporated Table of Cap.249 into SLBA’s Articles of Association as set out above.
- It is, therefore, right to posit that proxy voting was in force and operative under Cap.249.
Can proxy voting be permitted under the Companies Act 2009?
Section 197(2) of the Companies Act (as amended) 2009 stipulates:
“unless the articles otherwise provide, sub-section (1) shall not apply in the case of a company not having a share capital.”
Even though Cap 249 has been repealed by the Companies Act 2009, it would not affect the corporate documents, status and operations of a company incorporated under Cap 249. For this to be effective, SLBA would have to –
- Apply to the Corporate Affairs Commission and register itself.
- SLBA had applied for this re-registration.
- A certificate of registration under the Companies Act 2009 has since been issued to SLBA.
It is acknowledged that the SLBA is a company that does not have a share capital or is limited by guarantee. This notwithstanding, in view of the position of the law and the fact proxy was provided under the SLBA’s Articles and there has been no amendment of the Articles to do away with the proxy allowance provision, the position is that proxy voting by members of the SLBA is provided for the Articles hence the same shall be applied.
The Case Against Proxy Voting
The case against using proxies in the Sierra Leone Bar Association or any organization typically revolves around concerns regarding the potential for abuse, manipulation, or misrepresentation of voting interests. Critics argue that proxy voting enables individuals with limited or no genuine interest in the organization’s affairs to exert disproportionate influence over its decision-making processes. In the specific context of the Bar Association, where the integrity and professionalism of its members are paramount, allowing proxies may be perceived as compromising the democratic principles and legitimacy of the electoral process.
Critics contend that proxy voting opens the door for individuals to cast votes on behalf of absent members without adequate knowledge or authorization, thereby distorting the true intentions and preferences of the electorate.
Concerns also exist regarding the possibility of proxies being solicited or coerced by vested interests within the organization, leading to undue influence over voting outcomes. This could undermine the autonomy and independence of the Bar Association’s decision-making processes.
Proponents of proxy abolition argue that it weakens the accountability of voting members, as those delegating their voting rights may not be held responsible for the decisions made on their behalf. This lack of direct engagement may foster apathy and disengagement among members.
Managing proxy votes introduces logistical challenges and increases the risk of administrative errors or fraudulent activities, such as unauthorized proxy submissions or tampering with proxy documents.
The counterarguments
Proponents argue that proxy voting facilitates broader participation in the electoral process by enabling members unable to attend meetings due to geographic, logistical, or personal reasons to have still their voices heard and their votes counted.
Proxy voting ensures that the diverse perspectives and interests of all members, including those who may not be physically present at meetings, are considered in decision-making processes. It promotes inclusivity and reflects the democratic ethos of the organization.
Legal frameworks often include provisions and safeguards to mitigate the risks associated with proxy voting, such as requirements for written authorization, transparency in proxy solicitation, and mechanisms for challenging invalid proxies. These measures help uphold the integrity of the electoral process.
Without prejudice to the case for and against proxy voting, it is uncontroverted that, as a matter of law, proxy voting is provided for under the SLBA’s corporate instruments given the statutory right afforded to members of the company the same cannot be abrogated without due process; the amendment of the SLBA’s Articles.
Conclusion
Proxy voting in the SLBA elections embodies the dynamic tension between accessibility, accountability, and integrity. By upholding democratic principles, enhancing transparency, and fostering active member engagement, the Association can navigate the legal and logistical complexities of proxy voting, ensuring that the electoral process remains a cornerstone of its democratic ethos and institutional integrity. As a vital component of corporate governance, proxies empower members to participate in decision-making processes, transcending barriers of distance or circumstance.
Without prejudice to the rulings of the Court to a limited degree relating to proxies, the provision of the law regarding proxy voting is uncontroverted that unless the SLBA’s Articles are immediately or otherwise amended, proxy voting is, as a matter of law, mandatory. The SLBA is bound to comply with the same laws lest it acts in violation of its governing instrument and opens the door to legal challenges.
