Extend virtual AGMs until June, says CLRG’s Egan

For the first time under Irish law, a virtual AGM could be held this year, a Mason Hayes & Curran (MH&C) LLP webinar heard yesterday (2 December), though this provision only came into law in August.

Most AGMs went ahead this year, despite virus restrictions, but hotels will have lost out on hosting business, the webinar heard. 

Despite a confusing year on restrictions, business as usual continued, Justin McKenna of MH&C LLP said. 

Hindsight

The vast majority of issuers proceeded with AGMS, and those who postponed, in hindsight would have preferred to have gone ahead, Joe Molony, client services director with Computershare, told the webinar. 

“In general, the meeting season went quite well, bearing in mind the COVID restrictions,” he said. “The vast majority of issuers proceeded with meetings, as opposed to postponing and were happy that they did so.”

A different type of quorum preparation had to be undertaken, Joe Molony said, and issuers needed additional time to gather poll cards electronically.

Good wi-fi and technology, and clear communication, is essential for the smooth running of online AGMs, the webinar heard, with back-up telephone support a key factor.

Audio

‘Closed’ attendance AGMs should have one-way live audio streams, the webinar heard, since virus provisions will not belie any underlying company law requirements.

Members being turned away from a ‘closed’ AGM will not work under company law obligations.

April and May remained the most popular months for AGMs this year, with July gaining ground, the MH&C LLP AGM season 2020 report shows. 

The majority of companies surveyed “strongly advised” against in-person attendance though not all went as far as holding a “closed” AGM.

Only nine companies actually prohibited shareholder attendance.

Only three companies postponed their original AGM dates while four adjourned to a different location on the same day.

Hotels 

Of 23 companies whose AGMs fell during the initial pandemic, 20 hosted meetings in their corporate HQs with only two using hotels, one for a closed meeting while Ryanair held a public AGM.

One other company used the office of its lawyers.

Only 36% of companies declared a dividend this year, compared to 59% last year.

Molony said there has been a clear growth in virtual meetings globally but client bases will also consider hybrid versions.

Paul Egan of MH&C said that the substance of the law is the AGMs fulfil three functions – to provide information, to pass resolutions and as a forum for interaction.

The communication of information is generally out of date, he pointed out, and resolutions are rubber-stamping exercises since voting will largely have already taken place beforehand by proxy, he said. 

The Company Law Review Group (CLRG) had specified that virus-led legal changes should allow for clear communication.

Policy

“There was a policy decision made that there would have to be a requirement for shareholders to be heard because that is the true value of an AGM,” he said, albeit a minority, since most get their information from roadshows, analyst briefings and conference calls 

The CLRG was predominantly against ‘restricted access’ meetings, Paul Egan said.

“It is my earnest wish that, notwithstanding the lack of take-up among public companies, as against membership organisations and private companies, that there will be an extension of the legislation, which expires at the end of the year, such that it can run until June next,” he said. 

“I don’t, in the short term, envisage a change that would relieve companies of the requirement to have two-way communications at general meetings,” he said.

Restricted access AGMs will only work in the absence of shareholder dissent, he said.

Disruptive elements

The webinar heard that virtual meetings have been relatively secure from ‘Zoom-bombing’ by disruptive elements, through the use of extensive security provisions.

Anne Harkin of MH&C LLP said that female directorship on Irish boards is trending very positively, and was up to 29% of board seats of Irish listed PLCs, up from 25% last year and 19% in 2018.

In a breakthrough, AIB now has a majority of female directors, she said.