Virtual AGM's - the new normal?
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A virtual AGM is a great option in order to ensure that all necessary procedural and statutory legalities of the meeting are completed in a manner which respects social distancing rules while simultaneously encouraging engagement with shareholders without the technical concerns that may attend the conduct of votes by electronic means.
There are a number of practical and legal considerations concerning virtual AGMs and EGMs which have been largely influenced by the recent legislation in the area, most notably, the Companies (Miscellaneous Provisions) (Covid-19) Act 2020 (the "2020 Act").
There are a number of practical and legal considerations concerning virtual AGMs and EGMs which have been largely influenced by the recent legislation in the area, most notably, the Companies (Miscellaneous Provisions) (Covid-19) Act 2020 (the "2020 Act").
Legal Considerations
As a result of the 2020 Act, the ability to conduct a virtual AGM overrides any provisions in a company's constitution that might otherwise prevent it from doing so and therefore in such circumstances, no amendments to such company's constitution will be required.
- Software Platforms
There are a plentiful supply of software platforms to select as a mechanism of virtual hosting which meets the legal requirements as laid down in the 2020 Act. Examples of such platforms include: Bluejeans, Microsoft teams, Skype and Zoom to name a few.
For the avoidance of doubt, by the use of electronic communications technology must enable real time, two-way audio-visual or audio communication
For the avoidance of doubt, by the use of electronic communications technology must enable real time, two-way audio-visual or audio communication
- Wholly/Partly conducted
Notably, AGMs, EGMs, class meetings and scheme meetings (the "Meeting") can be conducted electronically either wholly or partly. This means that board members are afforded greater flexibility in respect of their preferred attendance at the meeting. Should members have difficulty in facilitating a virtual means of accessing the meeting, it would be possible to facilitate a physical meeting between two or more members in conjunction with the virtual option provided all attendees have a reasonable opportunity to participate in the Meeting.
Further, a virtual AGM allows the possibility of holding the meeting either inside or outside the State.
Further, a virtual AGM allows the possibility of holding the meeting either inside or outside the State.
- Notice of AGM
The 2020 Act includes specific requirements in relation to the form of notices of electronic general meetings (including class meetings) and the conduct of voting at such meetings.
The AGM notice should communicate to members that physical attendance at the meeting is discouraged and outline the company intention to comply with any public health recommendations restricting attendance.
The notice of the Meeting also contains details of a means of collective electronic communication (e.g. teleconference, videoconference) by which members may listen to the proceedings of the meeting and, potentially contribute to them by asking questions. To facilitate a meaningful meeting by technological means, it may be useful for a company to circulate details of where shareholders can submit questions in advance of the meeting with the meeting notice. Conducting the meeting by video conference may encourage participation and in the event where proxies have been appointed, companies should consider livestreaming the Meeting to all members and circulate a recording of the Meeting following the meeting.
The AGM notice should communicate to members that physical attendance at the meeting is discouraged and outline the company intention to comply with any public health recommendations restricting attendance.
The notice of the Meeting also contains details of a means of collective electronic communication (e.g. teleconference, videoconference) by which members may listen to the proceedings of the meeting and, potentially contribute to them by asking questions. To facilitate a meaningful meeting by technological means, it may be useful for a company to circulate details of where shareholders can submit questions in advance of the meeting with the meeting notice. Conducting the meeting by video conference may encourage participation and in the event where proxies have been appointed, companies should consider livestreaming the Meeting to all members and circulate a recording of the Meeting following the meeting.
- Execution of documents in counterparts
Hard copy documents requiring a company seal can now consist of two or more pieces of paper with the seal and the necessary signatures on separate pages. This provision applies only until 31 December 2020 or, if extended, until 30 June 2021.
Similarly, any other hard copy document requiring two or more signatures can consist of two or more pieces of paper with separate signatures on each. Subsequently, this allows for a greater efficiency in executing documents and minimizes physical handling of documents. This provision is a permanent change in the law.
Similarly, any other hard copy document requiring two or more signatures can consist of two or more pieces of paper with separate signatures on each. Subsequently, this allows for a greater efficiency in executing documents and minimizes physical handling of documents. This provision is a permanent change in the law.
- Rearranging Meetings
The 2020 Act provides for Directors to, at any time prior to the day of the scheduled Meeting (if this is deemed necessary to comply with public health guidance or restrictions on movement or gatherings), have discretion to:
- cancel a Meeting;
- change the venue; or
- change the means of holding the Meeting (including by facilitating electronic attendance).
In addition, directors will be able to cancel a Meeting at any time prior to the holding of that Meeting if this is deemed necessary due to exceptional and unexpected circumstances. The Act contains formalities regarding the manner of notice which must be given where a Meeting is rearranged or cancelled.
- Failure of Technology
Any temporary failure or disruption of electronic communications technology shall not invalidate the general meeting or any proceedings relating to the meeting.
Unless such failure or disruption is attributable to any willful act of the company, a company shall not be liable in respect of any failure or disruption relating to the equipment used by an attendee to access a general meeting by electronic communications technology that occurs and which failure or disruption prevents or interferes with the attendee’s participation, by way of such technology, in the meeting.
Unless such failure or disruption is attributable to any willful act of the company, a company shall not be liable in respect of any failure or disruption relating to the equipment used by an attendee to access a general meeting by electronic communications technology that occurs and which failure or disruption prevents or interferes with the attendee’s participation, by way of such technology, in the meeting.
- Voting at the Meeting
- Virtual Voting
- There are many suitable software platform which offer a mechanism for virtual voting. These include the specialist virtual meeting software, Lumi, and the commonly used questionnaire application, Surveymonkey, each of which can provide individual logins to facilitate voting security.
- In many cases, the simplest option may be to circulate email polling cards to attendees for completion and execution remotely. If necessary, the poll could potentially be conducted after the conclusion of the meeting.
- Voting by Postal Correspondence
- Consideration should be afforded to the locations of board members and any subsequent timing concerns that may arise as a result of facilitating return postal correspondence in time for the AGM.
- It is advisable that the board opens the envelopes and count the votes during the AGM for the purposes of fairness and transparency. It would be advisable that a marked envelope together with any correspondence is provided in order return the enclosed votes. This will minimalize the risk of administrative errors arising e.g. accidentally opening the wrong envelope in advance of the AGM etc.
- It would also be advisable to provide a stamped envelope together with a return label in order to make voting freely and easily accessible.
- Timeline of Effects
Subject to certain exceptions, the law consists of a series of temporary measures, which remain in force for until 31 December 2020 with a possibility of extension up to 30 June 2021 should public interest warrant such measures.
Practical Considerations
- Before the Meeting
- Directors should receive all relevant materials before the meeting. If circulated by email then password protection is appropriate.
- Ensure IT support is accessible during the meeting.
- Consider how your members will access the platform, the audit capabilities of the technology, and its security.
- It is advantageous that many software platforms such as Zoom are mobile friendly. This affords members a wider discretion in accessing the meeting. It is worthwhile confirming that the mobile version meets all of the functional requirements you have gathered. As many are still working from home, access to a traditional desktop may not be possible for all of your membership; some may rely on cellular phones or tablet computers to continue working.
- Ensure that an appropriate level of oversight is built into the platform allowing you to know who accessed the general meeting, when, and how they interacted with the platform once logged in, and this will be especially true for proxy interactions.
- Ensure too that the technology platform that you settle on has the appropriate level of security, such that only those invited to your general meeting will gain access to it. In line with the virtual corporate movement has been an increase in hacking and spam activities. It is advisable that you fully test the security of your platform with your supplier.
- Recommended Test Run
- Set aside time to rehearse the Meeting from start to finish with test users.
- You should also send your communication materials to test users, to ensure that the instructions relating to accessing the platform are clear and concise.
- Test user access to the platform, and have a plan in place to deal with troubleshooting issues in real time.
- Ensure that only invitees can access the platform, and probe the security with dummy accounts if necessary.
- Ensure that any materials you are providing ahead of time can be accessed by test users;
- Ask your speakers to go through their presentations, and ensure that they are heard and that their content is seen by test users.
- During the Meeting
- Ensure a properly constituted quorum are present on the telephone or video link. All directors attending must be able to hear and be heard so that they can participate and vote on the business of the meeting.
- The meeting should be adjourned if the telephone or video link ceases to work and reconvened when working. This should be reflected in the minutes.
- The chairperson should make use of the mute and unmute functions to ensure all directors get a say.
- If screen sharing is possible, this is a useful way of sharing the agenda and tabling documents.
- If directors are required to vote on a resolution, it is advisable to voice such votes as opposed to voting by a show of hands over a video conference. Consider if voting software is available on the video conferencing platform.
- After the Meeting:
- The minutes of the meeting should be circulated and ideally the directors who were present would confirm that the minutes are accurate to avoid any confusion or misunderstanding.
- The minutes should be signed by the chairperson where he/she is physically located. Subject to the company constitution board minutes and written resolutions may be signed electronically as opposed to by ‘wet ink’ signature.
Written by Conor Folan and Alice Normoyle
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