By Ashley Coakley, 7th April 2020 (Updated 25th May 2022)
The legislation to allow Annual General Meetings to be held online has been extended until 31st December 2022. The extension of the Companies (Miscellaneous Provisions) (Covid-19) Act 2020 has been welcomed by some 240,000 companies and 950 industrial and provident societies in Ireland. There is also talk of making hybrid annual meetings common practice. Robert Troy, the Minister for Trade Promotion, has said that work is in progress to put virtual AGMs and general meetings on a permanent statutory footing.
During Annual General Meeting season, we are often asked by quite a few clients how they can facilitate their AGM remotely using a Hybrid AGM. It is especially important that companies take steps, when possible, to remain compliant despite ongoing restrictions to stop the spread of COVID-19. In this blog post, we will give some advice on fulfilling the Annual General Meeting requirement and how to proceed with hybrid AGMs remotely. This will help ensure the company continues to exercise good corporate governance and remain compliant with the Companies Act.
Effects of COVID-19 on AGMs
As the effects of the COVID-19 crisis are still ever-present, many companies are continuing to face hardship and logistical difficulties. Even though companies are no longer obliged to work remotely or ensure social distancing, returning to the workplace is still difficult for some businesses. This has caused a challenge to client communication and an interruption to scheduled meetings.
This new business landscape could potentially result in setbacks for AGMs. Fortunately, the ‘Companies (Miscellaneous Provisions) (Covid-19) Act 2020’was signed into law on the 1st of August 2020, companies can hold general meetings through electronic means of communication. This bill was drafted to reflect recommendations made by the Company Law Review Group (CLRG) to the Companies Act 2014 to facilitate companies during this period. When the Bill was signed into law, the amendments were initially applicable to companies until the end of 2020, which was then extended until the 30th of April 2022. And, we are pleased to share that the provisions have once again been extended until the 31st of December 2022.
The Companies (Miscellaneous Provisions) (Covid-19) Act 2020 allows for:
- virtual meetings to take place, despite what the CA2014 and the company’s constitution requires
- documents that would normally be sealed, can be done so in counterpart
- creditors meetings can be done online
- examinership protection period increased to 150 days (from 70-100)
- winding up debt threshold increased to 50,000 euros (from 10,000)
The amendments to the 2014 Act will ultimately facilitate companies to proceed with AGMs in a safe manner. Allowing a general meeting to change venue, postpone or reschedule and to be held by electronic means.
Under section 175 of the Companies Act 2014, an annual general meeting must be held every annum, with no longer than 15 months between the date of one annual general meeting and the next. Unless the company is newly incorporated, in which case the first AGM must be held no longer than 18 months after incorporation. The Act removes the requirement for the first Annual General Meeting to be held within 18 months of incorporation and for no more than 15 months to elapse between one AGM and the next. The Act also allowed for 2020 AGM meetings to be held up to the end of 2021.
Section 176 of the Companies Act 2014 allows for Irish companies to hold meetings using technology, which could be useful during this period of social distancing. If your company’s constitution prohibits the company from holding a meeting by technological means, the company can pass a special resolution to amend the constitution to remove this provision. For assistance with this, please don’t hesitate to contact us. The Act, however, allows companies to hold virtual meetings during this time regardless of whether the provisions in their constitution prohibit this.
What is a Hybrid AGM?
Hybrid AGMs are popular forms of communicating for AGMs under Irish law. This form of communication may be used during this period to maintain government guidelines of social distancing. A hybrid AGM is both virtual and physical; It enables the meeting to take place with remote and physical participation of shareholders. Holding AGMs remotely would be convenient with the rise of COVID-19, reducing travel where possible. Possible mediums for a hybrid and electronic meeting include platforms such as Zoom, GoToMeeting and Microsoft Teams.
Video Conferencing to hold AGMs Remotely
With the use of video conferencing platforms such as Zoom and Skype, many companies are able to carry out business meetings as usual. This form of communication is more engaging than by phone, as it provides colleagues and clients with face to face interaction.
Zoom is an effective application that is widely accessible and facilitates video conferencing and audio tuning with a gallery view. Meetings are secured with a meeting ID and password and only the organizer can allow participants to join the meeting.
For example, Zoom has many features including:
- Online meetings
- Video webinars
- Conference rooms
- Phone system
- Online chat
Zoom also enables users to show slides on-screen to all members of the conference. Another useful tool is screen sharing, which allows multiple members attending the meeting to have access to one screen. There is also an interactive whiteboard, this is convenient for learning and training purposes. The host can also choose to mute all users when delivering useful information to the team, blocking out background noises. The application also has other interesting features such as virtual backgrounds and face filters.
Guidelines for Effectively using Video Conferencing in Board Meetings
It is essential that we use these platforms to our advantage, especially during the Covid-19 situation which prevents people from meeting physically. Generally, if a company’s constitution prohibits the use of a Hybrid or Electronic meeting, this should be avoided, however, the 2020 Act will facilitate companies during this time, should their Constitution state otherwise.
The steps below are guidelines to achieve an effective board meeting using video conferencing.
- Choose medium in advance – depending on what type of meeting is taking place, choose a medium that is best suited
- Inform the board in advance of the meeting – ensuring all members have an adequate internet connection and are registered with the video conference platform
- Take attendance
- Have a clear agenda schedule – allocate a team member to discuss certain points
- Approval of minutes from the last meeting
- Minutes allocated to one team member for the current meeting
- Issues and actions allocated to different members to discuss
- Key points for the next meeting’s agenda
If you have any questions on any of the information in this article or you need advice on how to remain compliant during the COVID-19 crisis please don’t hesitate to contact our Company Secretarial team on +353 (0)1 6461625 or complete our Contact Us form.
Disclaimer This article is for guidance purposes only. It does not constitute legal or professional advice. No liability is accepted by Company Bureau for any action taken or not taken in reliance on the information set out in this article. Professional or legal advice should be obtained before taking or refraining from any action as a result of this article. Any and all information is subject to change.