The future of AGMs

May 20, 2020

The future of AGMs

What are virtual and hybrid AGMs?

AGMs can be held in an entirely virtual format or in a hybrid format. Purely virtual AGMs are conducted entirely by electronic means – there is no physical meeting location. Hybrid AGMs on the other hand, are a combination of a virtual and physical AGM. A physical meeting takes place, but shareholders may elect to attend by virtual means instead. Both virtual and hybrid meetings might enable shareholders who would otherwise require a proxy to actually participate in and vote at the AGM.

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What are the benefits?

The need for virtual / hybrid AGMs appear to be increasing in many countries because the benefits – particularly but not only during times like these – are clear:

  • Offering shareholders the opportunity to participate online means they can participate from anywhere regardless of their location, making the meeting far more accessible to the vast majority of shareholders who are unable to attend physically.
  • There is less travel by shareholders and board so this consequently reduces the company’s carbon footprint and saves time and money for all.
  • Current technology permits sophisticated Q&A and messaging which ensures shareholders can effectively hold the board to account.
  • Substituting paper for digital voting means the process is more transparent, with instant results shown to participants and a full audit trail.

Even if your policies allow it, during normal times a fully virtual AGM might not be appropriate for all companies. This will to some extent depend on the makeup of the shareholder base. If companies have high attendance at their AGM but wish to further increase access then the hybrid option could be the right choice.

What you need to consider?

If your company is considering the switch to virtual or hybrid AGMs, you will need a solution which fulfills the following requirements:

  • Full image and sound broadcast of the entire event (optional in most cases)
  • Secure authentication process
  • Digital transmission of proxies up until online voting
  • Option to send questions in text form via digital communication channels which can then be read out and answered by the board
  • Prior to the meeting: sending electronic access data to shareholders so they can access the online shareholder portal

In markets where there hasn’t been any new legislation companies need to check that they’re allowed to carry out hybrid AGMs. If this isn’t the case, this is no doubt the year to consider making this change to allow for more flexibility in the future.

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