Legislation has been in place for UK companies to hold virtual AGMs since 2009 – the current Covid-19 pandemic may be the push needed to get this approach more universally recognised and fit for purpose for the 21st century.
AGMs exist to provide member approval for certain matters, and an opportunity for members to hold directors to account for the running of the company. Typically this happens through an efficient and effective physical meeting, and voting process. But the same outcomes can be achieved with a combination of webinar and electronic voting – with the benefit of not having to hire a large physical space and provide catering!
The first step is to check whether your Rules / Constitution / Articles of Association permit a Virtual AGM – they are unlikely to expressly prohibit an electronic meeting, however some require notice of AGM to state the place of the meeting so this would need to be considered. Best practice would be to amend the wording more clearly to include a virtual option for the future.
Additional best practice for conducting the Virtual AGM includes:
- Despite the meeting being conducted virtually, the usual requirements relating to quorum, notice periods and documents being on display still apply.
- A virtual AGM can benefit corporate governance by increased participation and access to the Board / Committee.
- Robust video and audio connections are essential as members must be able to be seen (identified by the Chair), speak and vote at the meeting which will require the use of appropriate technology. Provision of a contingency is important so that a failure of the primary system does not invalidate the meeting or require adjournment and reconvening
- Reduced travel by members and the Board reduces the organisation’s carbon footprint; time cost savings are also achieved
- Where possible allocate a unique username and password per attendee to add an extra level of security; provide a helpline number if anyone encounters difficulties
- Make sure the relevant directors are present (e.g. Chair, Secretary, Treasurer, etc) as appropriate to answer all questions. Conduct the meeting in such a way that people can hear the Chair’s remarks, ask questions and have them listen to answers (although for some detailed matters another forum may be more appropriate)
- Be mindful that some people will find it easier to ask questions using technology, and the silent majority may find it difficult to register disagreement – good engagement in advance will help with this
- Separate the voting from the meeting. Using online voting enables each member to vote in their own time, eliminating the need for proxy votes and increasing access for many remote members. Vote confirmation is simplified and counting automatic.