What COVID-19 might mean for your AGM and how to plan for it

When planning an Annual General Meeting (AGM), it is currently necessary to consider contingency plans in light of the spread of Covid-19. The Chartered Governance Institute is helping the Government to produce guidance offering suggestions reflecting UK company law and regulation. However, individual organisations will need to consider their own individual circumstances, including their Articles of Association and any other relevant matters.

There are effectively five options:

  • Adapt the basis on which you hold the AGM
  • Delay convening the AGM, if notice has not yet been issued
  • Postpone the AGM, if permitted under the Articles of Association (Articles)
  • Adjourn the AGM
  • Conduct a hybrid AGM, if permitted under the Articles

Although as the situation continues to evolve, companies may ultimately have to use more than one of these options.

Charity Commission Advice

This is the Charity Commission's advice on holding AGMs during the Coronavirus pandemic:

“Coronavirus is having a major impact on charity events and the government’s health advice may lead to some charities having no choice but to decide to cancel or postpone their AGMs and other critical meetings.

If as trustees, you decide it is necessary to do so, you should record this decision to demonstrate good governance of your charity. This is particularly important if it is not possible to hold your AGM which may make it difficult for you to finalise your annual reports and accounts.

In the current situation, it is becoming increasingly difficult to hold face-to-face meetings. Some charities have clauses in their governing documents that allow them to meet virtually or to use telephone facilities, so we advise trustees to check their governing document and see if they can make amendments themselves to facilitate changes as to how or when meetings are held.

Where there is no such clause in your governing document and you decide to hold meetings over the phone or using digital solutions, we will understand but you should record this decision and that you have done this to demonstrate good governance of your charity.”

AGM Guidelines Q & A

  1. Can a general meeting be validly held while the Stay at Home Measures are in force?

Yes, but general meetings will have to be held in a different way while the Stay at Home Measures are in force. While the requirements of a valid general meeting are in part determined by a charity’s articles of association, it should be possible to still hold a valid general meeting with attendees limited to quorum.

  1. Are trustees and committee members generally able to attend general meetings while the Stay at Home Measures are in force?

Not in person. The Stay at Home Measures prohibit public gatherings of more than two people. It should be made clear in the notice of meeting and on the website where the notice of meeting has already been published, that public gatherings of more than two people are not permitted under the Stay at Home Measures and that therefore members are not allowed to attend the meeting in person. However, members should, of course, be encouraged to vote by proxy. It may also be advisable for submission of questions for the chair in writing with the answers to be published in whatever manner is deemed appropriate (for example on the company website).

  1. What is the quorum requirement for AGM?

The quorum for a general meeting is typically set out in the Articles of Association.

Where the articles of association require more than two members to be present for a meeting to be quorate, these members may typically be present either in person or represented by proxy. In this case, two persons will need to be present in person in order to constitute a ‘meeting’, but one of them (for example, the person who chairs the general meeting) might be appointed as proxy for other members in order to fulfil the quorum requirement.

If a quorum requires the physical presence of more than two persons, then additional members or proxies may be required to attend in person and numbers should be kept to the minimum necessary to enable the meeting to proceed. Again, all appropriate social distancing measures should be observed.

  1. Who will chair a general meeting?

The articles will determine who chairs a general meeting. They typically provide that the chair of the board or, in the absence of the chair of the board, another director shall preside as chair of the meeting. It may be helpful for a director to attend as part of the quorum so that it is clear who shall act as chair of the meeting. Alternatively, articles may allow for any member to be elected to act as the chair of the meeting by a resolution of the company passed at that meeting.

 

 

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