On 17 April, the Financial Reporting Council and Department for Business, Energy and Industrial Strategy published a set of Q&As “designed to provide companies with additional information [about the Government’s proposed legislation to assist those companies for which COVID-19 restrictions make it difficult to meet statutory obligations to hold meetings and to file documentation on the Companies Register] upon which to plan activities over the coming months.”
Whilst it is still impossible to say when the new legislation will get through the Parliamentary process, the Q&As address a number of the most important issues that companies yet to hold their AGM will be considering, and give a very strong steer on the direction that the new legislation can be expected to take. In the meantime, the Q&As “direct companies to comprehensive guidance on the Chartered Governance Institute website advising on how processes might be managed within existing restrictions.”
The answers given suggest that companies will be able to hold ‘closed’ meetings with a small number of people attending by telephone or other electronic means, regardless of any provision otherwise in law or in their articles of association. Those attending the meeting in such a way will be able to form part of the quorum.
The Government has decided not to mandate virtual meetings given that these “are uncommon and largely untested in the UK”, but there is a strong indication that companies that wish to do so will be able to work on this basis. Although the Government is sensitive to the need for meetings as an opportunity for shareholder engagement, and will expect them to engage with shareholders before or after the AGM, they are not requiring that this be live and recommend voting by proxy.
Recognising that many offices are closed, the Government is also proposing to relax the requirement that shareholders be provided with a hard copy of any documentation on request