Covid-19: Navigating virtual shareholders' meetings in the UK
The Corporate Insolvency and Governance Act 2020 (Act), which came into force in June 2020, introduced measures to relieve the burden on companies during the coronavirus (Covid-19) outbreak. For a temporary period, which has been extended until 30 December 2020, companies are able to convene meetings in a flexible way through using a range of technologies. This has temporarily suspended shareholders’ ability to attend meetings in person.
What are the requirements for holding virtual meetings?
If a company’s meeting is due to be held before 30 December 2020, the meeting:
- Need not be held at any particular place;
- May be held by electronic or other means;
- May allow vote to be cast by electronic or other means; and
- May be held without any number of participants being together in the same place.
Until 30 December 2020 and subject to any local lockdown restrictions that might be implemented, members and shareholders do not have to:
- Physically attend such meetings in person;
- Participate in the meeting other than by voting; or
- Vote in any particular manner.
The above rules on virtual meetings apply regardless of whether or not a company’s articles of association (Articles) currently allow meetings to be held virtually. If a company’s Articles do not currently allow for virtual meetings, this could be an appropriate time to review and update the Articles to allow virtual meetings after the temporary Covid-19 measures end. Please note that changing a company’s Articles will require a special resolution.
What should be included in the notice of meeting?
Notice that a meeting is going to be held virtually should include the following details:
- The time and date of the meeting;
- That the meeting will be held virtually;
- What platform the meeting will be streamed on/accessed via;
- A clear agenda on what is going to be discussed at the meeting; and
- The full text of any special resolution.
It is good practice to provide footnotes in the notice stating that the meeting is being held electronically due to ongoing measures in place for Covid-19 and instructions on how the shareholders can access the virtual meeting.
What are the guidelines for participation during virtual meetings?
Provided that during the virtual meeting shareholders are able to exercise their rights to speak and vote, there does not appear to be any further requirements that cameras should be switched on during the meeting.
As a matter of good practice, companies holding a virtual meeting should put in place shareholder voting and identification procedures. Consideration should be given to enabling shareholders to follow the meeting and ask questions of the board of directors. There are conference facilities that allow participants to virtually ‘raise their hand’ if they have questions or queries.
How do shareholders submit a Form of Proxy?
The shareholders of a company may wish to vote in advance of the meeting by submitting a proxy form. This is where a shareholder of a company appoints another person to attend the meeting and vote on the shareholder’s behalf. This can be done regardless of if the shareholder intends to attend the virtual meeting, as personal circumstances may change and they may be unable to attend. For some companies, it may be worth specifically urging shareholders to vote by proxy ahead of the meeting.
If you need any assistance or guidance on either giving notice or holding a meeting under the current temporary Covid-19 rules, please do not hesitate to contact us.