Importance of Annual General Meeting for Non-Profit Organization

Oct 1, 2011
Constance Woloschuk

Non-Profit Annual General Meeting - McHaron

The Annual General Meeting is an important tool for the non-profit organization to demonstrate its accountability and showcase its community services.

Non-profit boards and management often consider the Annual General Meeting (AGM) a burden they would take pleasure in omitting from the agency’s calendar. However, there are many good reasons not only for holding an AGM, but also for taking the time and energy to do it well.

Compliance With Legislation and By-Laws

In many jurisdictions, it is mandatory for an incorporated, non-profit organization to hold an AGM. Also, there is usually reference to an AGM in the by-laws of the non-profit.

If there is relevant legislation for an AGM, it usually includes details on what must be presented at the meeting. For example, the board shall distribute the annual report and audited financial statements and the board for the coming year shall be confirmed or elected, depending on vacancies.

Public Accountability of Non-Profit

Actually scheduling an AGM demonstrates the intent of the non-profit organization to be accountable to the stakeholders. These stakeholders could include members, funders, donors, staff, clients, volunteers, community service partners, politicians, and the general public.

The primary document that is distributed and discussed is the organization's annual report. This report usually includes the following information.

Financial reports. Legislation usually requires audited financial statements that have to be filed with government tax departments. The board can take this a step further by having the treasurer present and distribute financial reports either separately or in summary form as part of the annual report.
Client service reports. Information on client services is also included in the annual report. It can be as dry as statistics on the number of clients, the kinds of services accessed, client outcomes, and the cost per service unit. This is particularly important information for funders and number crunchers.
Strategic plan. The key elements of the strategic plan for the next three to five years are also made public as part of the annual report.

All this information can be summarized in the annual report with the more complete documents available on request. This shows how the organization is accountable for monies received and for client outcomes of the services rendered.

Transparency of Governance and Operations

Demonstrating accountability is part, but not all of the transparency around the agency’s governance and operations. It is important that the agency is proactive in engaging the stakeholders, not simply complying with legislative requirements. There are organizations that appear to be closed shops with AGMs so tightly scripted that no one can comfortably ask a question and there is no opportunity for discussion of emerging issues.

Here are a few examples of transparency around the AGM.

Issue invitations and public announcements of the AGM at least three weeks beforehand.
Extend individual invitations to a cross-section of stakeholders on the list above to ensure an inclusive participation.
Prepare sufficient hard copies of the annual report and financial statements to distribute to attendees.
Ensure these documents are put on the organization’s web site the day after the meeting.
Allow sufficient time for questions during the meeting. Give straight, clear answers. It might be appropriate for a follow-up meeting with some attendees.
If the organization’s by-laws allow nominations from the floor for the board election, honor the spirit of that by-law by accepting all nominations as serious and allowing time for all nominees to introduce themselves.

All this effort says to the stakeholders, ‘there are no secrets here’.

Increased Awareness of Services

Even if it is not required, an AGM is an efficient, effective way for a service organization to raise awareness of the valuable services provided by the non-profit.

The board might want to consider the following ideas that celebrate and build on successes.

Enhanced annual report. Insert real stories of changes in the lives of men, women and children served by the agency’s staff and volunteers. Highlight the work of community partners. Express appreciation of the ongoing support of funders, donors, and politicians.
Stakeholder presentations. Arrange for a brief presentation or two by a client, staff, or volunteer. The client should be willing to share the changes in his life that were facilitated by the agency’s services. A staff person or volunteer could speak briefly about the challenges and rewards of front line work with the clients.
Tours. If appropriate, offer a tour of the facility before or after the AGM. Let a staff person, volunteer, or even a client be the tour guide.

Stakeholder Engagement

The AGM is a good time to engage stakeholders in the future work of the organization as it is outlined in the strategic plan.

In her presentation, the board chair or the Executive Director/CEO presents the following.

Key strategic directions for the next few years in order to address emerging issues.
Challenges to be met.
Opportunities for stakeholders to be involved. Give examples on several levels, from front line services to becoming a board member, in order to engage their interest and motivation.

Taking the time to organize and conduct a purposeful AGM helps the non-profit organization tell its story of client service, position itself in the community service system, and engage all its stakeholders in sharing its vision for future success. It is hoped that the board understands the benefits of such an AGM and commits to working with senior management to make it happen.