While annual general meetings (AGM) until recently used to be associated with in-person attendance, the recent global crisis has moved AGMs to the digital environment. What exactly are electronic or virtual AGMs? And how do they compare to in-person shareholder meetings?
What Are Virtual Annual General Meetings?
An annual general meeting (or annual shareholder meeting) is an often mandatory yearly meeting of a company’s shareholders. During the meeting, shareholders vote on key company operations (e.g., board appointments, compensation, dividends), participate in discussions, and ask questions.
During the meeting, directors give a rundown of all critical company-related information such as annual company performance, goals, and strategy.
A virtual AGM is the equivalent of an in-person shareholder meeting. The only difference is the format of the meeting—companies hold virtual AGM entirely online.
Shareholder meetings can also have a hybrid form, where participants who are unable to attend physically can attend online instead.
How Are Virtual Annual General Meetings Different from In-Person Meetings?
Virtual meetings let shareholders actively participate in annual general meetings, giving them the same set of privileges and transparency as in-person AGMs. The structure of the virtual AGM, as well as tasks on the agenda, also remains unchanged.
Companies should record their virtual annual general meetings as they are legal proceedings.
Are Virtual Annual General Meetings Secure?
Remote technologies used for conducting virtual meetings should provide high-level security for attendees, including secure network connection.
Because the main objective during AGMs is voting on critical company decisions, virtual AGM platforms employ robust security measures. Strict authentication and access control rules keep unauthorized third-parties from obtaining access to sensitive data and interfering with proceedings.
As an added security measure, companies hosting virtual AGMs should also consider implementing contingency plans. Provisions should be made in case of power outage or internet connection drop to ensure uninterrupted reception.
Are Virtual Annual General Meetings Legal?
While an increasing number of countries recognize the necessity for virtual annual shareholder meetings, this meeting format isn’t compliant everywhere. It’s therefore critical to review statutory requirements prior to organizing a virtual AGM meeting to ensure the virtual format is allowed.
There’s also the matter of company bylaws that specify the acceptable formats for shareholder meetings. If a virtual AGM isn’t accepted, the company should amend bylaws to include virtual shareholder meetings.
Can a Virtual Shareholder Meeting Save Money?
Hosting a virtual shareholder meeting reduces much of the spending observed in in-person meetings. You don’t need to rent a venue, purchase refreshments, or print documentation when you hold a meeting virtually. Similarly, you don’t incur travel and accommodation costs.
How Do Virtual AGMs Encourage Shareholder Engagement?
A virtual AGM allows shareholders to bring up more difficult matters through anonymous questions, as opposed to a traditional meeting. With fewer obstacles to attend the meeting (no travel or accommodation expenses), more shareholders might find it easier to actively participate.
Read how you can improve shareholder engagement through virtual meetings.
What Is the Attendance for Virtual AGMs?
Poor attendance and engagement during virtual AGMs are two of the biggest adoption fears for a virtual shareholder meeting. However, in the case of General Motor’s Corp.’s virtual annual shareholder meeting, attendance actually improved. The number of attendees rose by almost a hundred, from 35 to 125, after the company adopted the digital format.
While some shareholders still oppose virtual-only AGMs, there’s a growing need for this solution. Virtual AGMs cut travel and accommodation costs as well as the time necessary to organize and attend the meeting—obstacles that often contribute to poor AGM attendance.
Are There Any Technology Considerations for Virtual Annual General Meetings?
The technology employed to hold a virtual shareholder meeting should facilitate shareholder participation. At the same time, it should be evaluated yearly to check if the solution meets the goals of the meeting and if it does so in line with established processes.
The technology chosen for a virtual AGM should also let all shareholders participate and interact in an even manner. For more on this, read our guide to choosing the best AGM platform for your organization.
Virtual Annual General Meetings Help Companies Adapt to Rapid Changes
In times of crisis where global travel restrictions are enforced, virtual annual meetings are a safe alternative to in-person meetings. For companies that want to maintain operations, virtual AGMs might become the new normal.
However, organizations have to perform an in-depth analysis of which type of meeting will help them achieve goals safely and effectively. The decision between meeting formats depends on the complexity of the agenda and the number of attendees eligible to vote.
Are You Ready For Your First Virtual AGM?
Given the newness of the format, many companies are understandably apprehensive about holding a virtual AGM for the first time. It extremely important therefore, that companies find a dependable virtual AGM platform that will take care of any misconceptions they might have about the virtual format. The truth is, with the right tools and preparation, companies can easily hold virtual shareholder meetings with success.
With all these in mind, our team built AGM@Convene–a powerful platform designed to provide companies and shareholders with a seamless and highly secure AGM experience. Learn more about our solution or schedule a demo today.