We’re rapidly entering Annual General Meeting (AGM) season, and membership organisations will be trying to work out how to safely adhere to their obligation to hold their AGM whilst complying with the government’s ‘Stay Alert’ message.
More about the Act
The Corporate Insolvency and Governance Act 2020 brings about the most significant changes in corporate insolvency law for nearly 20 years. The overarching objective of the Act is to provide businesses with the flexibility and breathing space they need to continue trading during the difficult time caused by Covid-19.
The Act ensures all companies required to hold AGMs can continue to do so safely and effectively, in spite of the restrictions in place due to COVID-19. Priority will remain with preventing the spread of the virus, but new guidelines are set to be finalised, which will include an extension to the deadline to 30 September, applying to all companies who have been awaiting the green light to hold their AGM since 26 March.
The Act provides additional flexibility allowing associations and membership organisations to override obligations in three ways:
1. Meeting location – meetings will no longer need to take place in a specific location, and members no longer have the right to attend in person
2. Meeting conduct – meetings can now take place with a virtual component, and votes can be cast electronically. Members no longer have the right to participate in any way other than a vote.
3. Meeting deadline – organisations and companies with a deadline between 26 March and 30 September 2020 now share the deadline of 30 September 2020. This deadline also applies to accounts meetings and end of year reports filing to Companies House.
Best practice for holding your AGM
Strong communication lines and transparency with updates and resources is paramount under these unusual circumstances. It is important to ensure:
· All communications are issued in a timely fashion to allow members to vote in an informed manner
· That all meeting requirements and changes are clear to all members
· That members are given ample opportunity to submit questions and votes prior to the meeting date
· There is a clear long-term plan to continue to engage members after the meeting has finished and throughout the following months
· That minutes and responses to questions are circulated after the meeting
In your notice of AGM:
· Make it clear that the ‘Stay Alert’ measure mean that members will not be allowed to physically attend the AGM, but that alternative means of participating will be provided (and if possible, detail these)
· Shareholders should vote by proxy ahead of the event, or if appropriate, attend electronically
· Reiterate that the circumstances are understandable fluid, and as such, arrangements may be subject to change in accordance with the latest advice
The COVID-19 pandemic has presented membership organisations and associations with a wealth of challenges requiring solutions and thought, with the AGM a strong example of a situation where communication and safety take utmost priority. If you need any assistance or further advice requiring your AGM, please get in touch with a member of our governance team on 01787 226995 or email email@example.com