London, 27 March 2020 – The Chartered Governance Institute has today published updated guidance about company AGMs and the impact of Covid-19, which reflects the Government ban on public gatherings of more than two people. Prepared by Clifford Chance LLP, Freshfields Bruckhaus Deringer LLP, Linklaters LLP, Slaughter and May and The Chartered Governance Institute, the guidance offers advice on how listed companies incorporated under the UK Companies Act might implement contingency plans in light of the compulsory ‘Stay at Home Measures’ that the British Government has introduced to combat the spread of Coronavirus since the initial guidance was first published on 17 March.
The guidance is supported by the Financial Reporting Council, the Association of General Counsel and Company Secretaries working in FTSE 100 Companies (GC100), the Investment Association and the Quoted Companies Alliance, and has been reviewed by the Department for Business, Energy and Industrial Strategy.
Paul George, FRC Executive Director of Corporate Governance and Reporting said:
“These are unprecedented times for business so it is absolutely right companies have flexibility to conduct their general meetings in a safe and proportionate way, while ensuring shareholders remain actively engaged in the process.”
“Companies should familiarise themselves with the guidance and give plenty of thought to any measures they need to take now to ensure compliance with their responsibilities while keeping stakeholders and shareholders informed.”
The guidance, which reflects UK law and regulation, specifies that AGMs can still be held while the Stay at Home Measures are in force and offers the following advice on how best to do so:
The guidance also offers advice on how to ensure that the meeting is quorate, who should chair the meeting, which directors will be allowed or expected to attend the general meeting and where to hold the meeting in the event of the planned venue being unavailable or otherwise inaccessible.
Peter Swabey, Policy and Research Director at The Chartered Governance Institute advised:
“Keeping people safe at this critical time is of paramount importance and chairs have broad common law powers that allow them to prevent shareholders and proxies from attending as they are responsible for ensuring the safety of attendees. It is vital that the notice of meeting clearly states that public gatherings of more than two people are not permitted but, as the current situation is evolving on an almost daily basis, it would be prudent to note that a further announcement may be required. Shareholders should be encouraged to vote by proxy and companies may want to encourage the submission of questions for the board of directors in writing. Ensuring that shareholders are kept regularly updated and given their right to vote is crucial. Companies should check their articles of association and coordinate with registrars and venue providers in order to find a solution that works for them.”
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Notes to Editors: