Organising AGM during the lockdown

An Annual General Meeting (AGM) is an opportunity for company shareholders to raise issues with the board, engage directly with the management and discuss their concerns with other shareholders. However, the ongoing pandemic caused many companies to rethink and rework their strategies for holding such meetings. Bans on large gatherings, travel restrictions and other logistics have contributed to how AGMs are arranged. Companies then turn to virtual alternatives to hold their AGMs.

Organising an AGM during lockdown can be tricky, as AGMs traditionally require a whole day to be blocked out for all shareholders to attend. Regardless, shareholders and investors will want detailed updates on long-term sustainability strategies and to set expectations beyond the pandemic. Of course, companies should examine whether virtual AGMs satisfy all legal requirements and their preparations are accepted within the existing legal framework.

Holding a hybrid AGM

Hybrid AGMs allow shareholders to participate electronically in conjunction with a physical meeting. This may be done as long as the company has the required provisions in their constitutional documents and are in compliance with the relevant local laws.

Whether or not the company decides to hold a virtual-only meeting or a hybrid AGM, arrangements must be made to ensure that all participants are given avenues to vote. This includes online voting options and electronic proxy appointments. The ability to vote is critical in any AGM as big company issues are decided in the event, including filling up vacant positions in the board of directors.

For a successful AGM, companies need to choose a reliable technology provider that can adapt AGM documentation sent to shareholders. Companies should also provide an efficient way for shareholders to obtain the necessary information for AGM arrangements, as well as to send enquiries ahead of schedule.

Can AGMs be postponed or adjourned?

Companies should review their constitutional documents regarding the postponement or adjournment of their AGM. In the UK, for instance, an AGM can be postponed or adjourned only if the company’s articles of association explicitly state that it can.

Companies allowed to postpone their AGM can choose to issue their AGM notice as originally planned and rely on their ability to postpone based on their current relevant situation. The process for postponing will be governed by the articles of association. In case the Articles do not state otherwise, there is no statutory minimum notice period for rearranged meetings. For good practice, the company must try to provide 21 clear days’ notice, but depending on the circumstance that limits such announcements, a shorter notice period may be accepted. The postponed AGM should be held within 6 months of the company’s financial year end.

Adjournment of the AGM can only be considered if the company has issued its AGM notice and does not have the ability to postpone it included in its Articles. Generally, adjournment can only be done if a quorate meeting is held. The Articles, however, may provide a bit of leeway should there be lack of quorum. The adjourned meeting should be held within 6 months of the company’s financial year end.

Good Practice Recommendations for AGM during Lockdown

In light of the changes brought by the pandemic, companies are encouraged to put contingency plans in place for a smooth AGM arrangement. Companies must coordinate with registrars and venue providers to ensure rule compliance, as well as check the relevant provisions of the articles of association to avoid hiccups in the process. They should also keep updated with advice from governments, regulators and public health bodies as conditions change daily.

1. Keep shareholders on the loop 

Give clear instructions to shareholders regarding the processes in the AGM, including for appointing proxies, joining the call, relevant on-call conduct and electronic voting. Remind them to check the company’s website for any changes to AGM arrangements. To cover all bases, it’s also recommended to announce those changes via email. It’s important to inform shareholders of such changes as soon as possible to give them time to make the necessary arrangements on their end.

2. Encourage early return of proxies

Even if shareholders don’t attend in person, give them the chance to vote on company decisions at the AGM via proxy voting. Remind them to register their proxy appointment electronically, if such provisions are present, and submit the proxy online as soon as possible before the AGM. Supplement reminders via appropriate email, announcement on social media, and website updates.

3. Provide means for Q&A for the AGM

Shareholders should be able to submit questions prior to the meeting. This can be done electronically, so everyone has access and makes sure their concerns are addressed. Their questions can then be answered at the AGM and then included in a Q&A update on the company’s website afterwards. Ideally, some answers will be answered before the proxy deadline, allowing shareholders to make as informed a vote as possible at the AGM.

4. Encourage shareholders to pre-register

Pre-registration should be part of the AGM process, not just to determine the number of attendees but also to ensure the safety of the physical meeting place. For those attending physically, make arrangements for effective social distancing and ensure all participants have face masks and face coverings as appropriate. Remind shareholders that those who do not comply with the reasonable health and safety requirements shall not be allowed inside the venue. Also check that the meeting complies with the rules relevant to public gatherings, such as the maximum number of people allowed in an enclosed space.

5. Make arrangements for live streaming

If at all possible, arrange for live streaming the AGM, such as integration of the Zoom,Teams, or WebEx with the voting platform. Though it won’t be counted as formal attendance and won’t enable actual participation, it will still allow other shareholders to watch the proceedings and more effectively take notes that can be raised later.

Shareholders’ voting rights are critical in moving companies forward. To uphold these rights and corporate governance codes, companies are encouraged to find options that enable and support their development.

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