Virtual and Hybrid AGMs during COVID-19
On 20 March 2020 ASIC issued Media Release 20-068 Guidelines for meeting upcoming AGM and financial reporting requirements noting difficulties for listed and unlisted public companies with a 31 December 2019 balance date in holding an AGM by 31 May 2020, due to COVID-19 restrictions, and taking a 'no action' position for AGMs postponed for two months until 31 July 2020 or held using appropriate technology.
As a further step, from 6 May 2020, the Corporations (Coronavirus Economic Response) Determination (No. 1) 2020 (Determination) temporarily modifies Corporations Act provisions regulating the holding (and giving notices) of meetings. The Determination remains in force for six months until 5 November 2020.
On 6 May 2020 ASIC issued guidelines to assist companies in meeting the new requirements during this period (ASIC guidelines for investor meetings using virtual technology) encouraging companies to hold virtual (conducted solely online) or hybrid (a physical location and online facilities) meetings, due to COVID-19 restrictions on movement and large gatherings.
Key points from the Determination and ASIC's guidelines include:
The Determination allows meetings to be held using technology where members are given a reasonable opportunity to participate without being physically present. Members so participating are taken to be present at the meeting for all purposes, including as to quorum. Members should have an equivalent opportunity to participate in the meeting as if attending in person, including to ask questions live during the meeting, whether participating in person or virtually. Members should be able to consider responses to questions and debate before voting on resolutions at the meeting.
Voting in a hybrid or virtual meeting
The Determination requires voting to be by a poll and not a show of hands, using technology to enable members to participate in the vote in real time. Where practicable, voting via online or other means should be available before the meeting. Members should have the option to vote live during the meeting via technology even where the option to vote prior to the meeting is also available. A duly appointed proxy must be treated in the same way as if the appointing member was attending in person.
Content of notice of meeting
The Determination provides that a notice of meeting may be given (and other information in relation to the meeting may be provided) using technology to communicate to members the contents of the notice and other information, or details of where those items can be viewed online or downloaded (such as by emailing a link to members, or by mailing out URL details). The notice must include clear explanations about how members can participate in the meeting, including how to use the technology to vote and ask questions, with proxies able to be appointed using technology specified in the notice.
If a notice of meeting was given before the Determination, then the company must at least seven days before the meeting, give a fresh notice of meeting that includes the above information relating to the technology to be used to ensure members have a reasonable opportunity to participate.
Companies should assess technologies prior to the meeting, with back-up plans to overcome technical issues. If technical difficulties render a number of members unable to reasonably participate, the meeting should be adjourned until the problem is fixed.
Amended 'no action' position
By Media Release 20-113, ASIC has on 13 May 2020 extended its 'no action' position where public companies with a balance date from 31 December 2019 to 7 July 2020 do not hold an AGM within five months, allowing a further two months to do so, and for those with balance dates from 1 June 2020 to 7 July 2020, where this extension may result in them not holding an AGM in each calendar year (namely in 2020) as required, the 'no action' position will also apply