Held yearly, the annual general meeting (AGM) provides shareholders the chance to raise issues and concerns with the directors of the company. The directors present a report on the company’s financial performance at the AGM and shareholders vote on matters at hand. Annual general meetings transcription ensures that the proceedings are accurately documented for sharing, reference, and reporting.
Physical shareholder meetings are on hold due to the COVID-19 pandemic. According to a report from corpgov.law.harvard.edu, the total number of meetings postponed or cancelled globally as of March 31, 2020 due to COVID-19 was about 557. The number of meetings that would be virtual-only or proxy-only stood at 560 in 2020, while this number stood at 286 for the entire 2019 calendar.
Emergency legislation is bringing about major changes regarding the type of AGM companies can hold and when it can be held. The Harvard Law School Forum on Corporate Governance reported on the flexibilities announced by the Securities and Exchange Commission (SEC) following the COVID-19 outbreak:
- In most U.S. states, companies could generally hold either hybrid or virtual-only meetings without seeking shareholder approval.
- Companies could change the date or location of their shareholder meeting or shift from an in-person meeting to a virtual meeting due to COVID-19.
- Companies could postpone their AGM, switch from an in-person format to a virtual meeting, or choose another physical location to minimize public health concerns.
- Companies were encouraged to allow shareholder proponents or their representatives to convey their proposals via telephone and not insist on physical attendance.
- Publicly traded companies were provided with a 45-day extension to file annual and quarterly reports and certain other disclosure documents.
- Publicly traded companies may be exempted from providing hard copies of proxy statements and annual reports if the shareholder’s mailing address is located in an area where mail delivery was disrupted due to the pandemic.
According a report from the International Corporate Governance Network (ICGN), the need for virtual or hybrid shareholder meetings had been growing among some issuers and institutional investors even prior to COVID-19 pandemic. Today, the availability of new technologies offers the opportunity for hybrid and virtual AGMs, and have made shareholder meetings more accessible for investors. A virtual AGM is one which is conducted electronically and there is no physical meeting location. The virtual format offers companies definitive flexibility when it comes to meeting emergency situations such as COVID-19. A hybrid AGM would have a physical meeting location, but shareholders can choose whether to participate in person or virtually. Typically, in both these meeting types, shareholders would be able to cast their votes in real time and ask questions (www.mondaq.com).
Benefits of virtual/hybrid AGMs include:
- Eliminates geographical barriers – shareholders can participate from anywhere regardless of their location
- Reduces travel requirements – reduces the company’s carbon footprint and saves time and money
- New technology enables advanced Q&A and messaging which ensures shareholders can effectively hold the board responsible
- Digital voting ensures transparency, and participants can view results instantly along with a full audit trail.
Before holding a virtual or hybrid AGM, companies should ascertain that they are legally permitted to hold a virtual or hybrid AGM and understand how to maintain compliance when they conduct the same. They should also check if corporate by-laws need to be amended to allow for virtual meetings. They should then inform shareholders of the decision. EQS Group recommends that companies should ensure that their technology service provider can provide them with a platform which meets the following requirements:
- Full image and sound broadcast of the entire event
- Secure authentication process
- Digital transmission of proxies up until online voting
- Option to send questions in text form digitally, which can then be read out and answered by the board
- Send electronic access data to shareholders before the meeting so they can access the online shareholder portal
The COVID-19 pandemic and related emergency regulations are driving regulators, companies and investors to examine the potential of changing the traditional format of shareholder meetings. Business transcription companies with expertise in annual general meetings transcription can record every detail and ensure quality documentation of the proceedings.