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On 17 March 2020 the Chartered Governance Institute issued guidance (CGI Guidance) for companies planning their annual general meeting (AGM) in light of the coronavirus (COVID-19) crisis, produced in conjunction with Slaughter and May and supported by the Financial Reporting Council (FRC), GC100, the Investment Association (IA) and the Quoted Companies Alliance (QCA).
The options available to companies (as described in the CGI Guidance), as well as the various issues to consider in relation to each option, are: adapting the basis on which the AGM is held, delaying convening the AGM, postponing the AGM, adjourning the AGM and conducting a hybrid AGM.
On 26 March 2020, compulsory measures (the 'Stay at Home Measures') prohibiting, among other things, public gatherings of more than two people were passed into law in England and Wales, with immediate effect, in statutory instruments (SI 2020/350 in England and SI 2020/353 in Wales) made pursuant to the Public Health (Control of Disease) Act 1984.
As a result of these developments the CGI published supplementary guidance (Supplement) specifically aimed at companies who do not wish or are not able to postpone their meetings. This Supplement was prepared, in conjunction with the CGI, by Linklaters LLP, Slaughter and May, Clifford Chance LLP, Freshfields Bruckhaus Deringer LLP, with the support of the FRC, the City of London Law Society Company Law Committee, GC100, the IA and the QCA. It sets out their views regarding how listed companies incorporated under the UK Companies Acts might implement contingency plans in light of the Stay at Home Measures in the absence of any relevant legislative changes. The BEIS has also reviewed the Supplement.
This Supplement emphasises the importance of checking relevant provisions of a company’s articles of association and coordinating with registrars and venue providers, as is ensuring shareholders are kept regularly updated and are given their right to vote. The Supplement offers suggestions reflecting UK company law and associated regulation. Companies will need to consider their own individual circumstances, including their articles of association and any other relevant matters.
The Supplement offers guidance in relation to ability to hold a valid meeting, attendance at the meeting, powers to prevent shareholders attending, quorum requirements (including where the requirement is for a quorum greater than two), chairing the meeting, the role of other directors and the location of the meeting. See our Coronavirus (COVID-19)—AGM tracker for details of how FTSE 350 and AIM 50 companies are responding to the crisis and associated guidance, including links to the relevant Notices of AGM, revised notices, announcements and company websites.
On 28 March 2020 the Business Secretary announced that the government will introduce legislation to ensure those companies required by law to hold AGMs will be able to do so safely, consistent with the restrictions on movement and gatherings introduced to address the spread of coronavirus. Companies will temporarily be extended greater flexibilities, including holding AGMs online or postponing the meetings. This measure follows an announcement earlier this week that companies would automatically and immediately be granted a three-month extension to the filing of their accounts following a fast-track online process.
For further information see Practice Notes: Coronavirus (COVID-19)—holding general meetings and AGMs and Holding an AGM of a listed public company.
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