You may have seen our recent legal update Dividend Cuts. Since publishing that update ICSA have released a guidance note on the withdrawal or amendment of a dividend resolution which is to be put to the AGM. The note contains clear guidance on how to withdraw or amend the resolution up to the point the resolution has been put to the AGM.

We are starting to see a range of approaches appear within the market with some companies opting to use interim dividends as a more flexible way to offer investors some form of return albeit with the ability to change that position up until the point that the payment is made. Others are opting to cut the dividend completely given the current uncertainty and competing demands for cash in their underlying businesses and some have ploughed ahead with their dividends remaining unchanged.

As the AGM season unfolds what is clear is that directors are having to balance the competing interests of a range of stakeholders during unprecedented times making the decision on whether or not to recommend a dividend increasingly more complex.

Written by Amy Carr.