Over the last few weeks, we’ve seen some important guidance released by the ICSA: The Chartered Governance Institute, providing companies with information on how to conduct AGMs during 2021.
The ICSA’s guidance note which is endorsed by the Government, the FRC and other industry and shareholder groups, provides companies with answers to several key questions. These include:
• How should companies prepare for meetings in 2021?
Be flexible in your planning for meetings held after the 30 March. After this date ‘closed door meetings’ will not be permitted without new primary legislation which is highly unlikely at the time of writing. Factor in what may happen if lockdown measures are ended and a tiered system is re-introduced, or partial restrictions are in place on travel and gatherings. Consider how these factors might impact the ability to have physical attendance.
• Can the format of the meeting be changed at the last minute?
The institute recommend that companies should address a potential format change within their notice of meeting, or at least guide shareholders to where to find such information.
• Are hybrid meetings permitted?
Such meetings are permissible, in the view of the Institute, so long as your articles do not explicitly forbid it. Either due to requiring attendees to be present at a physical location or through some form of prohibition on electronic participation. Remote participation in a hybrid meeting should be on the same basis as if physically attending in that attendees should be able to hear proceedings and be able to speak at them.
• How should questions be handled in a virtual environment?
Functionality of systems being used must be considered as the ability to only ask questions through a chat function, is unlikely to equate to the ability to ‘speak’ or be ‘heard’. If your articles do not have specific provisions that allow communication in a different way a company would need to incorporate audio functionality. Companies are advised to seek their own legal guidance on what might be permitted under their Articles and would be sufficient to constitute a meeting adhering to all necessary legal requirements.
To help you plan your 2021 shareholder meeting, we've created a Virtual Shareholder Meeting Checklist. This combines best practice and real-life client experiences, including managing over 2,000 virtual shareholder meetings globally in 2020.
If you need any assistance in understanding how technology can support remote participation by your shareholders, please contact your Client Manager and we’ll be happy to guide you through the possibilities.