Chairman Speech

CHAIRMAN'S SPEECH 

The chairman's speech is not required by law. It is a matter, of custom or tradition. Basically the chairman's speech is to give details or highlight aspects that are not covered in the director's report as the later document includes the statutory information. He reads the chairman's speech at the annual general meeting before the meeting takes up the consideration of the statutory items starting from reading of the notice, auditors' report and the discussion on the accounts of the company. Copies of the speech are sometimes distributed to the members attending the annual general meeting before entering the venue of the meeting. However, in other cases such speech is handed over to the shareholders at the conclusion of the meeting either separately to all shareholders including those who have attended the meeting or along with dividend warrants.

It is also customary to advertise the chairman's speech or an abridged version thereof in leading newspapers for the interest of the general public prospective investors. In the advertisement a note is added that the speech published does not purport to be the proceedings of the meeting as a measure of abundant caution since section 197 of the act prohibits the publication at the company's cost any report of the proceedings of a meeting unless it covers all the matters given in section 193.

Like the director's report, the secretary in coordination with the head of  the operating functions drafts the chairman's speech before it is finalized by the chairman. Since there is no statutory provision relating to chairman's speech, there is no hard and fast rule as to what it should contain and thus the length, style and nature of the speech varies from chairman to chairman and company to company.

The chairman's speech for a particular company may differ from year to year depending on the circumstances, but matters that are generally included in the speech are :

• Review of the company's working,
• Progress during the year,  
• Measures initiated to overcome such difficulties, and
• Immediate and future prospects of the Company.

Where the chairman reads his speech before commencing the statutory items of business at the annual general meeting the minutes of the meeting must include a reference to this and could be worded either that after the chairman's speech, he requested the secretary to read the auditors' report or include a brief summary of the speech in the minutes of the meeting.