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Holding company meetings under COVID-19 restrictions

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As more COVID-19 related restrictions come into force, affecting public gatherings, travel, self-isolation and homeworking, companies need to consider how they will be able to comply with the formal requirements for decision-making and company meetings. 

Board meetings

There are very few statutory requirements relating to the conduct of board meetings so the primary source for the relevant rules in each case will be the company's articles of association.

Companies which have adopted the Model Articles (or similar terms) have the benefit of express provisions permitting virtual board meetings. These allow directors to participate in meetings by any means provided each director can communicate with the others. So, for example, telephone conference calls, skype calls and video-conferencing, amongst other solutions, would all be permitted.

Older companies may still use Table A as their default articles. There is no express provision in Table A that permits board meetings to be held by telephone or other electronic means. Historically, this was strictly interpreted as meaning that, unless the articles were altered, board meetings had to be held physically. But more recently, against a background of technological developments, a more relaxed approach is taken and it is generally accepted that directors' meetings may be conducted by telephone or other electronic link even in the absence of an express enabling provision. 

Whatever the means by which the board meeting is actually held, any other formalities set out in the articles will also have to be observed, for example in relation to quorum, notice and voting.

Public company AGMs

Although private companies are no longer required to hold an AGM, all public companies (including unlisted public companies) must do so. 

For companies with a 31 December year end, now is prime AGM season. An AGM notice may already have been sent out or companies may be in the process of planning their meeting. In either case, companies should be thinking about appropriate contingency plans in light of the COVID-19 outbreak.

The Chartered Governance Institute's Guidance:

New guidance issued by ICSA The Chartered Governance Institute suggests there are five options available:

  • Adapt the basis on which the AGM is held – for example, book a fall back venue or move to another venue, encourage proxy voting or hold an additional shareholder event later in the year (which would not replace the AGM but would give shareholders another opportunity to engage with the board directly once restrictions have been lifted).
  • Delay convening the AGM, if notice has not yet been issued – although there may be little leeway here, particularly for companies with a 31 December year end, as an AGM must be held within six months of that date.
  • Postpone the AGM, if permitted under the relevant company's articles of association – again, however, the AGM must still be held within six months of year end.
  • Adjourn the AGM – this could be used where a company has issued the AGM notice but doesn't have a postponement power in its articles. Again, the six month time limit will apply. 
  • Conduct a hybrid AGM, a combination of physical and electronic meetings, if permitted under the articles – if the AGM notice has already been issued, the meeting could be converted to a hybrid meeting if the articles allow.

Which option is most appropriate will depend on a number of different factors, including the specific provisions of the company's articles and whether the AGM notice has already been issued. It may also be necessary to employ more than one option: for example, if the company chooses to conduct a hybrid meeting, shareholders will still be able to attend in person and so some of the recommended measures for adapting a meeting may also be required.

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