It is clear that the 2020 AGM season is one we will remember for a very long time, with meetings not being conducted in the way most of us would have thought when preparations commenced earlier this year. However, as our environment has changed and rules enforcing social distancing have been introduced, meetings have continued with relatively few postponements. This update provides a snapshot of the changes that have taken place and shares best practice, along with the latest on the legislative framework as at 20 May.
Previous guidance we have issued during the course of the season can be found further down this page. This includes our COVID-19 and AGM webinar from 17 March and a subsequent blog where we discussed certain aspects of the evolving meeting season and guidance available.
How are meetings being conducted?
As governments around the world introduced the Stay at Home measures in recent months, many companies had to adapt how their AGMs would be held in conformity with the new rules. More companies are adopting a greater use of technology to facilitate participation and stave off any accusation of stifling shareholder democracy (more on this below), whilst at the same time limiting the attendance of shareholders in accordance with the Stay at Home/Stay Alert measures and government/advisory body recommendations.
According to the ISS COVID resource centre, only 14 UK and two Irish companies have held virtual meetings so far this year. ISS also noted that the Irish market has seen 98 postponed or cancelled meetings, whereas the UK has seen 45. It is worth noting that these figures may include private market companies. In terms of the listed companies we have seen, the postponements have been far fewer.
With our client base, we have seen a growing number of companies adopting a form of ‘hybrid’ meeting and encouraging remote participation from shareholders in a variety of forms. In some instances it provides a simple mechanism for shareholders to listen and follow along with the meeting albeit this does not technically constitute a hybrid meeting as the remote participants do not form part of any quorum. In other cases, such as with Polymetal highlighted below, the remote participation has extended to facilitate the exercise of the broader set of shareholder rights including the rights to ask questions and vote on the business of the meeting. This constitutes a hybrid meeting and enables the participant to qualify towards the quorum, subject to the company’s Articles of Association.
Based on data being compiled by the GC100, as of 7 May, 30% of the FTSE 350 and AIM 50 have already announced that whilst their meetings will go ahead, they are advising shareholders not to attend the AGM due to government restrictions. They are instead encouraging shareholders to take advantage of their right to appoint the Chair as their proxy and submit voting instructions using the voting platforms made available to them. In our experience, this trend has continued since this data was collated and published.
Virtual and hybrid meetings – a global view
The approach to meetings has varied around the world depending on local rules, pre-existing geographical factors and the acceptance of the available technologies used to facilitate remote participation. By way of illustration: