With the need for public safety and adhering to social distancing, only a few AGM’s will be conducted inside at single physical location this year. Companies updating their practices in the current climate are now facing the possibility of postponing their AGM’s. For those going ahead, it’s important to discuss if it will be Hybrid or Virtual AGM’s. Hybrid meetings have a speaker and some staff in one (or a number) of physical venues with some audience present and most of the audience watching online. The Virtual alternative has everyone participating in the meeting exclusively online. While online meetings are happening all the time to conduct normal business meetings, listed companies may face challenges in running an AGM exclusively online. The benefit of running a hybrid AGM is that it gives members and directors the opportunity to engage a larger number of shareholders, plan company expectations, and strategize for new investors.
The Australian Securities & Investments Commission (ASIC) issued guidelines earlier in the year for a “no action” position on AGM’s, however, on 6 May 2020 later modifications took effect that allow AGM’s to continue with a few key points:
- Companies with a balance date of December 31 2020 have two extra months to hold their AGM
- Hybrid and Virtual are allowed
- The technology used for the meeting must allow participants to question or make comments to management/auditor
- Voting occurs via poll - not show of hands
- If stakeholders were notified of the physical AGM, they must be given at least two days’ notice of the Virtual/Hybrid AGM
If going ahead with an AGM, it’s important to first ask your shareholders their preference. It might sound simple, but it can make the difference. Shareholders who think they’re going to be attending a physical AGM meeting might not be satisfied with an online meeting. It’s important that the speakers giving informed decisions on the company are comfortable with the type of meeting planned. Postponing is an option that may be the right choice, subject to the greenlight from ASIC.
However, if your AGM needs to go ahead, the next consideration is whether Hybrid or Virtual is the right choice. Redback have noted some important considerations for both:
What social distancing guidelines are in place for the venue staff and stakeholders?
How will you conduct voting?
Can technical difficulties be handled efficiently and timely?
How will you present; audio or video?
Where are the speakers presenting from; home office? External venue?
Are you using a secure platform?
Regardless if the AGM is Hybrid or Virtual it is critical that your company’s most important meeting of the year goes smoothly. Technology is amazing until it isn’t and you don’t want to have future operational excellence plans go awry because of an avoidable technical outage. So be meticulous with how you decide to hold your meetings and consider using only the best for you and your shareholders.
Written by: Jessica Hausheer