Posted by James Worrall, Partner
Corporate Governance and Coronavirus
The Department for Business, Energy and Industrial Strategy, in conjunction with the Financial Reporting Council have issued a further Q&A offering guidance to companies in relation to statutory filings, AGMs and other general meetings.
This follows the announcement on 28 March 2020 that the Government intended to bring forward legislation to assist companies struggling to meet statutory obligations in relation to filings and holding meetings due to the impact of Coronavirus. You can find out more about those obligations in this earlier blog on Corporate governance.
The Q&As include the following:
- Whilst the legislation has not yet come into effect the Government intends to introduce the legislation as soon as Parliamentary time allows, and the measures relating to meetings will be drafted to take effect retrospectively from 26 March.
- If an AGM needs to be held by a certain date and the legislation has not passed by the date at which notice of the meeting needs to be given, the company should still call the meeting, even if it is likely to be delayed once legally possible.
- The proposed legislation will enable companies to temporarily override certain requirements in their constitutions relating to the mode of meeting, for example, a requirement to hold a physical meeting. In the longer term, companies should review their constitutional documents to determine whether additional flexibility is required.
- Under the proposed legislation, companies will have until the end of September 2020 to hold their AGMs, with the Government having the power to grant further extensions. Companies required to hold AGMs under their constitutions will be given the same grace period as those required to hold AGMs by legislation.
- The same flexibilities around the mode in which general or other meetings of members are convened will be available until the end of September 2020.
- Directors should explore all options to provide shareholders with the best level and quality of engagement they can reasonably expect. For example, where physical meetings cannot be held, they should do what they can to hold them virtually. Processes and timelines should be designed so that as wide a range of members as reasonably practicable can engage, exercise their voting rights, and their feedback can be taken into account.
- Companies should consider the specific requirements of their articles, and the resolutions passed at previous AGMs, to determine whether the authorisations obtained at last year’s AGM will still be valid if the AGM is postponed to more than a year after the last AGM.
The full Q&As are available on the Financial Reporting Council website.
For more information on the above, or other corporate governance matters, contact James Worrall or another member of our Corporate team.
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