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Latest Guidance in respect of Company AGMs and other general meetings

20/05/2020

At a glance

The Government announced on 14 May 2020 that they intend to introduce legislation, which will be made retrospective to 26 March, to provide temporary measures to give companies flexibility around Annual General Meetings (AGMs) and other meetings, including postponing AGMs and holding them online. These measures are subject to the successful passage of the upcoming Corporate Insolvency and Governance Bill.

The Bill was published and had its first reading in parliament on 20 May 2020.  The government intends to ask Parliament to expedite the parliamentary progress of the Bill. 

Director, Melanie Talbot discusses this in more detail below.

Following this announcement, the BEIS and the FRC jointly released Q&As to provide additional information on what the proposed measures will mean for businesses, and to assist with companies plans over the coming months.  The Q&As can be found here [https://www.frc.org.uk/news/may/additional-information-on-company-filings-and-agms].

The Q&As included the following:-

  1. Retrospective Effect – The Government intends to introduce the legislation as soon as the Parliamentary timetable allows, but these measures will be drafted to take effect retrospectively from 26 March 2020.  However it is clear from the Q&As that companies must make their own judgement, alongside their advisers, about whether to hold an AGM in accordance with the draft legislation (for example, virtually), as it cannot be guaranteed that the draft legislation will pass into law.
  2. Delay in passing the legislation – if the legislation has not passed by the notice period date, companies should still call the meeting, even if it is likely to be delayed once legally possible.  Shareholders should be kept informed of the company’s plans, including if the company intends to delay once the legislation is approved.
  3. Override Constitutional Documents – The proposed legislation will enable companies to override certain requirements in their constitutional documents in relation to the mode of meeting, i.e. holding a physical meeting.  We would advise companies in the longer term to review their constitutional documents to determine whether greater flexibility is required to permit the company to hold “virtual” meetings.
  4. Postpone AGMs – Under the proposed legislation, companies will have until the end of September 2020 to hold their AGMs, with the government having the power to make further extensions.  Companies will need to consider whether they practically need to hold the AGMs earlier, for example if share authorities are due to expire.
  5. Virtual Meetings – Under the proposed legislation, meetings may be held, and any votes may be permitted to be cast, by electronic means. Directors should explore all options to provide members with the best level and quality of engagement that they can reasonably expect.  For example, where a physical meeting cannot be held, they should do what they can to hold them virtually.  Processes and timelines should be designed so that as wide a range of members as reasonably practicable can engage, exercise their voting rights, and their feedback can be taken into account. BEIS and FRC intend to publish guidance on best practice in this regard.
  6. Engaging with Shareholders – Companies are encourage to use conference calls, video calls and email questions, to engage with shareholders.  Where possible any questions should be dealt with at, or prior to, the meeting or failing that as soon as possible once the meeting has ended.
  7. General Meetings – the government intends to offer the same flexibilities around the mode in which these meetings are convened until the end of September.
  8. Accounts – The proposed legislation permits a public company that was required to file its accounts after 25 March 2020, to delay the filing of its accounts until the earliest of 30 September 2020, and the last day of the period of 12 months immediately following the end of the relevant accounting reference period.

Also of interest is our previous article on the delays for publishing accounts which you can find here.

We will provide a further update as soon as the draft legislation is published.  In the meantime please get in touch with us if you would like to discuss any issues regarding your company’s upcoming 2020 AGM or any other shareholder meeting.

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