The Stay at Home Measures will prevent shareholders from attending AGMs in person as they prohibit public gatherings of more than two people. Attendance at a general meeting by a shareholder (other than where their individual attendance is specifically required to form the quorum for that meeting) is not "essential for work purposes", which is the only relevant exception.
The company should make it clear in its notice of the meeting, or by RIS announcement and on its website where the notice of meeting has already been published, that the Stay at Home Measures mean shareholders cannot attend the meeting in person and should attend by proxy. The wording should make it clear that anyone seeking to attend the meeting will be denied entry1. The provisions of the Corporate Insolvency and Governance Bill, if passed, will ensure that shareholders will not have a right to attend in person.
Can the meeting go ahead?
For most companies, the preference will be to hold the AGM on the proposed date, as the business of the meeting will include obtaining annual renewal of authorities from shareholders including for share allotments, disapplication of pre-emption rights and share buybacks buybacks. It may also include approval of key documents such as employee share schemes. The government has introduced measures in the Corporate Insolvency and Governance Bill which will assist companies in holding general meetings in compliance with the Stay at Home Measures. These would include (a) the ability for an AGM to go ahead with a minimum quorum of shareholders (usually two), and (b) the ability for those shareholders to attend remotely without the requirement for all shareholders to have access to an electronic meeting and electronic voting, which can be complex and costly, and (c) the ability to hold a fully "virtual" meeting (i.e. without the requirement for a physical place of meeting). The Bill, if passed, will allow companies whose meetings are, or were, due between 26 March 2020 and 30 September 2020 to delay their AGM until 30 September.
In the meantime, several companies have held their AGMs with a minimum quorum present at the intended venue, or an alternative venue, and have instructed shareholders to vote by proxy as physical attendance would not be in compliance with the Stay at Home Measures.
Postponement or adjournment
If a company wishes to change the time or place of the meeting, it has the following options:
Postponement: The articles of association may allow postponement of the meeting. The company will need to comply with the requirements of its articles as regards publicising the postponement and new arrangements. It will also need to consider whether the company has time to postpone the AGM, given the statutory requirement to hold it within six months of its financial year-end.
Change of venue: The company's articles may allow it to change the venue of the meeting without the need for an adjournment as set out below. If this is not the case then a quorum of shareholders will need to open the meeting at the original venue in order to adjourn to a more suitable one.
Adjournment: If the company's articles do not allow it to postpone the meeting, then the chair and sufficient shareholders to constitute a quorum should attend the venue (remaining outside if necessary) in order to adjourn the meeting to a date and time, and/or a venue, that the company considers practicable. The chair will generally hold sufficient proxies (giving discretion on procedural motions) to allow an adjournment motion to pass.
Time-sensitive matters: If a meeting is to be postponed or adjourned, companies will need to check that the expiry dates of their existing share capital authorities (e.g. the authority to buy back shares) do not affect any planned corporate actions or existing programmes. In most cases it will be preferable to go ahead with the meeting as planned if possible.
Can members attend remotely?
The Corporate Insolvency and Governance Bill provides that companies may hold fully virtual or "hybrid" meetings (i.e. meetings where there is a physical meeting but members can attend electronically instead of being physically present). If the decision is taken to hold a virtual or hybrid meeting and all shareholders are permitted to attend, the notice will have to contain the procedures which shareholders will need to follow in order to attend electronically.
Hybrid meetings have historically been quite rare, but we expect that there will be increasing demand in the coming months on a limited number of service providers. Therefore if a hybrid meeting is proposed, arrangements should be made as soon as possible.
As an alternative to a hybrid meeting, some companies are providing for members to join a call or a live-stream webcast so that they can follow the proceedings remotely, although they will not count towards the quorum or be able to vote at the meeting (other than by proxy). Other companies are simply providing for shareholders to submit questions to the board in advance of the meeting.
1 As stated in the ICSA guidance: AGMs and impact of Covid-19: Supplement