Irish AGMs during the times of COVID-19

With social distancing advocated as one of the main societal actions that can be taken to reduce the transmission of Coronavirus COVID-19 (COVID-19), we examine some of the steps that can be taken by companies with respect to their annual general meetings (AGMs) considering HSE and government guidance to protect employees, shareholders and other stakeholders, and avoid possible virus transmission.

As COVID-19 rapidly sweeps across the globe, companies are radically redefining the ways in which they operate to reduce the risk of virus transmission. One of the main dilemmas now facing company secretaries and boards of directors, is identifying the most suitable means in which they can ensure the fulfilment of their AGM requirements, while also adhering to HSE and government guidance to contain the virus.

Requirement to convene an annual general meeting

Pursuant to section 175 of the Companies Act 2014 (the Act) Irish companies are required to call an AGM in each calendar year. No more than fifteen months should elapse between the holding of one AGM and the next. The exception to this is newly incorporated companies, and, provided they hold their first AGM within eighteen months of incorporation, they are not required to hold their first AGM in the year of incorporation or the following year.

The AGM is an important event in the calendar year for shareholders. Not only does it provide the opportunity to review the financial performance of an entity, it also provides a forum for shareholders to engage in the management of certain affairs and vote on certain matters in relation thereto.

Suggested alternatives to convening AGMs

Given the advice being issued by the HSE and government in respect of social distancing, it is advisable that companies avoid holding physical AGMs or, where possible, implement sufficient measures to ensure that physical distancing is possible.

Consideration should be given to alternative options such as postponing or re-scheduling AGMs, using proxies to vote at an AGM, or, where possible, passing a written resolution of members.

Further information on these alternative options is set out below:

Convene AGMs for a later date

Where notice of an AGM has not yet been issued, and assuming there are no applicable requirements on timing, AGMs should be postponed until a later date in the year.

Some important considerations to be mindful of in this regard would include:

• not more than fifteen months shall elapse between the holding of one AGM and the next; and
• not more than nine months shall elapse between the date of the AGM and the financial year end.

AGM adjournment

Where it is not possible to postpone an AGM or, where a company has already issued notice of the AGM to members, AGMs can be adjourned and re-convened to a later date. In order for this to be effective, the AGM must first be held and immediately adjourned to a later date.

Encouraging the use of proxies by members

To reduce the potential numbers in attendance at an AGM, members could be issued with supplementary guidance to that effect in conjunction with the AGM notice, or, as a follow-up to the notice, advising that a proxy be appointed to attend and vote at the AGM on their behalf.

Technology

While Irish company law does not expressly permit general meetings to be conducted virtually, participation by members by other electronic means is permissible once the meeting has a physical location. As such, even where the constitution of a company permits its members to participate in its AGM by technological means, a physical location is still required. It should be noted that attendance and voting by members at an AGM will only be permitted where the constitution of the company expressly permits it.

Certain technological means may be relied upon to disseminate information to shareholders and therefore further reducing the necessity for members to attend in person. In particular, a company may, where possible, livestream the AGM to its members, and consideration may also be given to circulating a recording of the AGM to members after the meeting. In addition, shareholders might be invited to submit questions to be addressed by the Board in advance of the AGM being held.

Written resolution of the members of the company

An alternative option available to private companies limited by shares is to pass a written resolution of its members instead of holding a physical AGM. In addition, a single member designated activity company may also pass a written resolution of its members instead of holding a physical AGM.

For further information on the above, please contact our corporate services team.

See our Coronavirus (COVID-19) feature for more information generally on the possible legal implications of COVID-19.