What is a Virtual/hybrid AGM? – know the difference

For years the companies have been Conducting the annual AGM physically. Only recently due to pandemic which led to travel restrictions and social distancing, Companies had to conduct AGM digitally, As postponing the AGM is not an option. For this reason Virtual AGM is the most convenient solution. A virtual meeting occurs when there is no physical meeting venue available.

Virtual AGM solutions will continue to gain popularity as we continue our shift to an advanced digital landscape as it promotes Clarity, efficiency, innovation, inclusivity, and transparency.

What is the future of the AGM?

When it comes to conducting AGM there are a lot of factors that are required to carry out the event properly. The traditional AGM includes venue, food, refreshment, entertainment, post cleanup procedures, All of this requires a generous amount time and money. When it comes to virtual AGM, the hassle and costing decreases by a significant amount. It also offers more efficiency in order to conduct the AGM.

However institutional investors have raised concerns on virtual AGMs. AGMs are an event where the entire board is asked to attend physically in order to hear questions and concerns

If companies understand the advantages in holding Virtual/Hybrid AGMs there are a number of opportunities a company can benefit from. With the increased use of technology, the process of AGM has become more accurate and less time consuming, This leaves a good impression about the company on shareholders.

What are virtual and hybrid AGMs?

Virtual AGM is when the AGM event is carried out by a digital platform, Any user is able to access the meeting from any electronic device from any place.  Hybrid AGM has a physical location for a meeting but it’s up to the shareholders to make a decision whether they want to be physically present in the venue or join virtually.

 In both cases, shareholders are able to do the regular activities that are required for the event, which includes casting their votes in real-time and ask questions. In efforts to save costs, however, some companies have elected to conduct hybrid AGMs this year using a webcast with Comjagat Technologies which offers GOCON AGM an interactive technology platform, which enables the shareholders to do all the activities that they normally do in an AGM.

Hybrid Meeting – As touched upon already, this is a crossover between a physical and virtual meeting, which allows stakeholders, members or attendees to opt between attending at the meeting’s physical location, or being involved online from the comfort of their own home, smartphone, tablet or office. This removes the need for everyone to be in one location, and opens up the possibility of higher attendance and engagement.

Virtual Meeting – This type of meeting has been rapidly adapted by the companies in bangladesh due to the outbreak of Covid-19 recently. All the attendees of a virtual meeting attend via an online platform allowing them to ask questions, vote and participate electronically in real time, as they would do at a physical meeting.

Can all companies hold a virtual or hybrid AGM?

In order for a company to hold a virtual or hybrid AGM, it must be permitted under its articles, by-laws, and applicable corporate statute. It is important to establish whether it is possible for a company to establish the AGM meeting electronically. If they have the proper resources and shareholders that will be comfortable with the virtual meetings. Keeping all the factors in mind it can be decided what is the best way to conduct the AGM meeting. However, In general, all the companies can hold a virtual or hybrid AGM as this is most efficient and easier to conduct AGM.

Is It possible to conduct AGM through a webcast?

Through a regular webinar it is possible to communicate with participants in a meeting, However, when it comes to AGM meeting conducting through a webinar, The requirement to have all the participants, the board of directors communicate with each other “ clearly and efficiently”  becomes very challenging. This is why it is very important to conduct the virtual AGM from a platform that is solely created to conduct AGM virtually as that will include all the features that are required for conducting a perfect virtual AGM smoothly.

Have hybrid & virtual AGMs been conducted in practice?

Bangladeshi companies are slowly relying on technology when it comes to general meetings. Due to the pandemic, the dependency on technology for carrying out meetings and AGM has rapidly increased.

 Live webcasting, electronic voting via the AGM platform, and increasing use of electronic polls, asking questions, seeing instant vote results have become frequent features of AGMs in recent years, particularly among large listed companies. However, there are still few companies that are taking it slow when it comes to shifting their AGMS or meeting on digital platforms.

What if a virtual or hybrid AGM is not permitted?

When a company is unable to hold a virtual-only AGM as a result of its by-laws, its board of directors should generally are able to amend such by-laws in order to allow for a virtual-only AGM, and ask shareholders to support the decision.

If a company is not permitted to hold a virtual or hybrid AGM under its applicable corporate statute, it can apply for a court order allowing it to do so They can have a meeting with shareholders and come to an understanding about how they can change the option and allow virtual AGMs to be conducted.

What needs to change in the notice of the meeting?

There are a number of requirements for an AGM that is needed to be check prior to the meeting. This includes incorporating clear, concise and effective explanations of:

• How to use the technology to observe, vote, make comments and ask questions
• What are the ways to express their perspective?
• How will the meeting run smoothly?
• What will be the ways to vote, comment, and ask questions will be provided to those participating virtually.
• Post AGM data collection or exports of the documents taken from the meetings; This includes voting numbers, results, attendee list, etc.

Best practices for Virtual AGM

Companies that decide to hold a virtual or hybrid AGM should:

• Contact legal counsel to discuss whether the company is permitted to hold a virtual or hybrid AGM and how to conduct the same within the applicable legal framework;

• Finalize the guidelines of the virtual AGM. Which will include the guidelines for the shareholders and the board of directors that needs to be followed during the AGM.

• Engage technology service providers and transfer agents to confirm the procedure and ensure all necessary requirements can be met;
• Communicate with shareholders after decisions are made and take reassurance from them, In case anyone has anything different to say or have any concerns.
• Deliver robust disclosure in proxy related materials on how shareholders can participate electronically in the AGM;

• Consider the business of the meeting: if the AGM may be contentious, the decision to hold a virtual or hybrid meeting may be scrutinized and accusations of suppressing shareholder participation may surface;

• Establish trust between participants this will include all the necessary options for the participants to raise their concerns and options to give their opinions and make them available before the AGM to ensure that there will be an opportunity for shareholders to have their opinions heard.
• Conclude the Event: After the end of the AGM, The moderators should summarize the event where all the results and decisions are said again. This will bring more clarity in the AGM and a better way to establish great interaction with the shareholders.