06 April, 2017
The growing opinion of shareholders and directors alike is that attendance of annual general meetings, and overall participation in such meetings, is on the decrease. However, there may be a solution on the horizon.
Last year, Jimmy Choo PLC held the first "virtual" AGM of a UK listed company; whilst in the US, these virtual meetings are already becoming standard practice. Most commonly these virtual meetings are real-time video conference calls, with the option to use voting buttons or a view presentation alongside the video. Virtual meetings not to be confused with "hybrid" or satellite meetings, where there is always an element of physical location involved.
Virtual AGMs are appearing more attractive as an option to companies for a multitude of reasons. Where shareholders might be unable to be physically present for meetings due to distance or schedule; holding the meeting electronically enables ease of contact and participation regardless of location. Both time and expenditure can be greatly reduced, and the practice is also more economical from an organisational point of view.
Any question as to the validity of these meetings can be easily dismissed. Both the Shareholder Rights Directive and the Companies Act grant shareholders the right to any form of participation available in meetings via electronic methods.
Of course, companies wishing to begin holding virtual AGMs must be mindful of a number of provisions. Specific terms within the articles of association may need amending, and conditions must be in place to ensure the chairman is aware of who is speaking, or what happens should technology fail or a shareholder is without internet access.
Virtual AGMs could reduce costs, save time overall and also reduce the need for proxies, re-establishing the direct participation of shareholders. If you require advice on how these virtual meetings could benefit your company, or assistance in ensuring they are a valid option within the articles and provisions of the company, please contact Jennifer Bell via firstname.lastname@example.org or on 0333 207 1130.