General meetings (including AGMS) via video conferencing under current Covid-19 emergency measures
The Corporate Insolvency and Governance Act 2020 came into force on 26th June 2020.
In light of the Covid-19 pandemic, the purpose of this act is to override statutory and company constitutional requirements to permit board meetings and general meetings via virtual means during the period 26 March – 30 September 2020. The act also permits the postponement of annual general meetings to 30 September 2020.
Unless the articles of association of a company expressly permit attending board meetings or general meetings by electronic/virtual means, there is a presumption that such an action is not permissible. Any decisions made at such an incorrectly held meeting could therefore be void or open to challenge. The act allows companies to override their corporate constitution to ensure compliance with government social distancing measures. The Act applies to any general meetings and therefore if companies wish to hold either a board meeting or general meeting during this period, the directors of a company could rely on the provisions of the Act, without the need for compliance with its constitutional framework.
Assuming that the application of the act ends on 30 September 2020 (albeit the legislation allows for the Secretary of State to extend this period to 5 April 2021), the position will revert to the pre-Covid-19 position; that board meetings and general meetings (and AGMs) held via electronic/ virtual means are not permitted unless expressly set out in a company’s articles of association.
Our view would therefore be, absent any extension of the application of the act, that all companies take this opportunity to review their articles and make any necessary amendments. Companies may wish to consider adopting flexible wording in their articles to enable the board of directors a degree of discretion/ flexibility when it is reasonably practicable to adopt the approach of holding virtual general meetings in the current unprecedented circumstances and, fundamentally, to ensure the safety of their directors, shareholders and stakeholders.
Need some advice on statutory and company constitutional requirements, we’re here for you – get in touch.