The Covid-19 pandemic accelerated the adoption of holding Annual General Meetings (AGMs) via virtual means. However, as we move towards normalcy, companies are reverting to holding physical AGMs. The question that remains is: should companies still hold virtual AGMs?
Virtual AGMs are held on platforms like Zoom, Microsoft Teams, Cisco Webex or Google Meet. Participants in the meeting are shareholders or their proxies and the meeting is usually run by the company directors and/ or the company secretary. Here are some of the considerations on whether companies should hold a virtual AGM.
To save cost
Holding a physical AGM would mean getting all shareholders to be physically present at the venue of the AGM. While some companies may have the physical space to host all shareholders, some companies may elect to hold the AGM in rented spaces. One popular consideration is meeting rooms at hotels. This invariably leads to costs involved. The cost to rent a space can run up to hundreds or even thousands of dollars. This money can probably be put to other uses if there is no need to rent such a space.
To save time
Shareholders have to travel down to the AGM venue. This will cost them time and effort to do so. The time spent to set up the venue by the organisers can also be significant. This is especially so if the number of shareholders attending is large and seats and tables have to be reorganised to a certain configuration to accommodate everyone.
It can accommodate shareholders who are based overseas
The main issue we have as a corporate service provider is reaching out to foreign shareholders and getting a suitable date for them to attend the AGM. While the company can provide the foreign shareholder with the requisite notice to attend the AGM, out of courtesy we will try to pick dates whereby we can accommodate the foreign shareholders physically flying down to attend the AGM. The main gripe we receive from such shareholders includes the unavailability of affordable flights and lodging as well as them not being able to attend as they cannot leave their commitments in their home country. A virtual AGM solves these issues as it allows the foreign shareholder to be at the meeting and saves them the hassle of having to travel just for the AGM. Shareholder participation in AGMs typically result in higher shareholder satisfaction with the management of the company. Hence it is key for a company to always consider the shareholders’ ability to attend general meetings.
Virtual AGMs are accurate, transparent and independent
It is easy to record a virtual AGM. For accountability, we do record the meetings. It helps us come up with the meeting minutes as well as if there are any disputes which may occur, we can have a record to look back on what was discussed or agreed upon. Shareholders can vote anonymously as there are no other shareholders around to influence or discuss with. Votes can be submitted digitally and it helps the secretary with the tallying of the votes. If there are any disputes, everything is recorded. The voting can be done publicly or privately depending on the meeting platform selected as well as the features that are enabled for the meeting.
It is easier to control the meeting by virtual means
Have you ever been in a meeting whereby multiple parties try to speak all at the same time? Yes, that actually happens at some physical AGMs. When you hold a virtual AGM, the host can control who speaks. If you have an experienced host, he or she will be able to allow every party to speak sequentially. This can help to minimize conflicts as well as help with solving issues that shareholders raise in a more structured fashion.
While it seems like there are many benefits to holding a virtual AGM (we do encourage our clients to do so!), some companies may still choose to hold a physical AGM. One of the main considerations is that a physical AGM seems more personal than a virtual one. Whatever the case, if you have any queries or need an experienced corporate service provider to assist you with your virtual or physical AGM, do drop us an email at [email protected].
The editorial team at singaporesecretaryservices.com