CHAPTER 05 Let’s Take This Online: Virtual Shareholders’ Meetings in 2020 and Beyond
Virtual Shareholders’ Meetings Prior to COVID-19 As discussed in Davies Governance Insights 2018 , 89 virtual shareholders’ meetings can facilitate shareholder participation by enabling shareholders to attend meetings, listen to discussions, ask questions and vote their shares, all through the means of secure technology and without the cost and time of participating in person.
contemporaneously – whether because of technical constraints or the particular virtual format made available by the issuer. We discussed these and other pros and cons of virtual shareholders’ meetings in Davies Governance Insights 2018 . 90 Changing Rules and Policies in Response to COVID-19 The 2020 proxy season had already commenced when the World Health Organization declared COVID-19 a global pandemic on March 11, 2020. The unfortunate timing left hundreds of issuers with upcoming annual general (or general and special) shareholders’ meetings (AGMs) scrambling to navigate corporate and securities laws, stock exchange requirements and leading proxy advisory firms’ voting guidelines. These requirements and guidelines presumed the feasibility of large in- person gatherings and provided little flexibility regarding how and when AGMs could be held. Recognizing the need for pragmatism, corporate and securities regulators, stock exchanges and proxy advisory firms reacted swiftly to craft workable solutions to help safeguard the health of all stakeholders without disenfranchising shareholders. Recognizing the need for pragmatism, corporate and securities regulators, stock exchanges and proxy advisory firms reacted swiftly to craft workable solutions to help safeguard the health of all stakeholders without disenfranchising shareholders.
There are two principal types of virtual shareholders’ meetings:
– Hybrid-virtual meetings. These are traditional in-person meetings that are supplemented by an electronic component whereby shareholders not physically attending the meeting can hear, and sometimes view, the meeting proceedings in real time, as well as ask questions and vote online contemporaneously. – Virtual-only meetings. These meetings cannot be attended in person by shareholders. Accessing an online portal is the sole means available to attend, ask questions and vote at the meeting. Prior to COVID-19, the primary advantage of virtual shareholders’ meetings relative to traditional in- person meetings was increasing access to meetings for a greater number of shareholders, largely due to the elimination of travel costs and reduced time commitments. Conversely, the primary disadvantage of virtual meetings compared to traditional in-person meetings was, and still is, the potential to disenfranchise shareholders; this may be caused by limitations on asking questions, meeting and speaking with the issuer’s leadership in person and/or voting
69
Davies | dwpv.com
Powered by FlippingBook