Before the COVID-19 pandemic, general meetings could only be held as physical meetings or hybrid meetings (that is, a meeting that is held both in a physical place and held using an online platform), but not as wholly virtual meetings (that is, a meeting that is held wholly via an online platform). Amendments to the Corporations Act 2001 (Cth) (Corporations Act) have now made permanent several temporary measures adopted in response to the COVID-19 pandemic, including in relation to hybrid and virtual meetings.
Key permanent changes
- Hybrid meetings – You can still hold hybrid general meetings.
- Wholly virtual meetings – You can now hold wholly virtual general meetings if the company’s constitution expressly permits or requires this. This differs from the temporary measures introduced in 2020, which allowed a company to hold virtual meetings regardless of the content of its constitution. When the temporary changes were implemented, there was some concern expressed by shareholders and shareholder advocates that wholly virtual meetings would reduce transparency and shareholder engagement. The requirement that virtual meetings must be expressly permitted by a company’s constitution ensures that the decision to permit wholly virtual meetings must be made by shareholders themselves and this cannot be imposed on them by the directors.
- Quorum – A person who attends a meeting, whether at a physical venue or by using virtual meeting technology, is taken for all purposes to be present in person at the meeting while so attending.
- Participation – Shareholders, as a whole, must be given a reasonable opportunity to participate. This includes holding the meeting at a reasonable time and place and ensuring that shareholders can ask questions and make comments both orally and in writing. A court may declare a meeting invalid if there was not a reasonable opportunity to participate and it considers there was or may be substantial injustice, and that injustice cannot be remedied by any order of the court.
- Sending meeting documents – Shareholders can elect to receive notice of meetings, proxy forms or other documents relating to meetings in physical form or electronically (by attaching them to an email or providing a link to them). They can also elect not to receive annual reports. A public company must notify shareholders each year of their right to make these choices or put such notice on the company’s website. Shareholders also have the right to make ad hoc requests to be sent particular documents in physical form or electronically.
- Signing proxy forms – You may sign a document relating to a meeting, such a proxy form, by signing an electronic form of the document using an electronic means if the method identifies you, indicates your intention in respect of the information recorded in the document and is reliable as appropriate for the purposes for which the information was recorded.
- Independent scrutineer – Shareholders of a listed company with at least 5% of the votes may request the company to appoint an independent person to observe the conduct of a poll, or to scrutinise the outcome of a poll, and prepare a report.
Practical tips in preparation for your 2022 AGM
- If your company’s constitution does not expressly permit or require wholly virtual meetings, consider whether you wish to amend the constitution.
- If you will hold a hybrid or virtual meeting, ensure that the technology facilitates (1) recording who is present, (2) both oral and written engagement (such as via a live chat function) and (3) voting.
- Public companies must give annual notice to shareholders about their right to choose how they will receive documents (or to choose not to receive annual reports) or, alternatively, this notice must be included on the company’s website.
- In order to send documents electronically, you will need to have collected shareholders’ email addresses.