The government has confirmed that it is considering solutions for the impact COVID-19 may have on companies’ ability to hold AGMs. Updated guidance on this matter will be published in due course.
Despite the world grinding to a halt as a result of COVID-19, many UK companies remain under an obligation to hold an AGM during this crisis. With AGM season likely to coincide with the peak of the coronavirus outbreak, how does this obligation correlate with the UK government's advice to forgo any unnecessary social contact?
The Chartered Governance Institute has provided five options to such companies:
- adapt the way the AGM is held;
- delay the AGM (if notice of the meeting has not been circulated);
- postpone the AGM;
- adjourn the AGM; and/or
- conduct a hybrid AGM.
Depending on the company's circumstances, a company may wish to use more than one of the above options.
Drawing out a few of the key points from the guidance:
- if the AGM is to go ahead as planned:
- consider contacting the venue provider to ensure it can still take place;
- encourange proxy voting;
- keep shareholders fully informed of the plan;
- ensure it is likely to be quorate;
- provide remote access via live stream or phone link;
- consider whether directors should attend.
- to postpone an AGM, the company's articles need to permit it;
- if a delay or postponement is possible:
- update the market (if the time and date have already been publicised);
- review expiration of standing authorities;
- consider proposed date of dividend payments;
- consider validity of listing rules and/or DTR statements in the report and accounts.
- adjournment should only be a last resort if postponement is not possible.
These recommendations are based on current law. In these fast-moving times - especially in light of the severe restrictions being enforced across Europe - the government may bring in emergency legislation to provide flexibility to companies that are currently legally required to hold an AGM despite government recommendations to limit social contact. We will provide further updates if and when this happens.
Companies planning their AGM should be considering contingency plans in light of the spread of Covid-19