Innovative Changes to Conduct Annual General Meetings During COVID-19
Annual General Meetings Through Video Conferencing Mode
The recent move by the Ministry of Corporate Affairs in India to let the companies conduct Annual General Meetings (AGM) through video conferencing mode is welcome. The decision comes at a time when the globe is witnessing pandemic crisis due to which certain restrictions related to social distancing is imposed. While an AGM requires mandatory physical presence of the board members and the shareholders, the video conferencing option otherwise is a welcome reprieve to the Companies.
The move to conduct AGMs and the participation of the Board in such AGMs through video conferencing already exists as per Section 173(2) of the Companies Act 2013. The relaxation currently given by the Ministry will ensure that the meetings are conducted as per the schedule without missing any deadline and thus comply with necessary regulations in a time-bound manner.
Email Communication during an Annual General Meetings
Further, the companies need to arrange for physical copies of financial statements, board reports and other documents to be laid on the table during the AGM and presented to the shareholders under section 134 of the Companies Act of 2013. The Ministry now has further relaxed the requirement to send physical copies and has insisted to arrange for the same through email to the shareholders.
The move to arrange for documents related to AGM is highly appreciated at a time when the companies are switching to various sustainability measures and such environment-friendly moves will only help to save paper.
The email communication mechanism to the investors acts as an excellent channel to keep the shareholders informed and help them to stay abreast of the recent developments related to the Board and the Company
E-Voting Option Prior to Annual General Meetings
E-voting is yet another critical component of the AGMs involving both the Board and Shareholders. E-voting mechanism lets the Board to take crucial decisions regarding the company's important decisions announced to the shareholders promptly. E-voting has been replaced with the traditional postal ballot which was otherwise a time consuming process to determine the results.
Through E-voting arrangement the shareholders may cast their vote online and the Board may determine the results to take a major decision easily through online mode and let the investors know of the results through tranparent process of displaying the online results.
COVID-19 thus has resulted in effective change management to the companies resulting various innovaitve measures to otherwise conduct the business as usual. The need to conduct physical meetings otherwise involved huge costs to the companies including venue management, postal ballot and registration mandates before the meeting. The move to conduct AGMs through video conferencing is yet an another innovative concept and the same will thrive well under the ambit of Corporate Governance and Sustainability.
The policy makers including the government too should be appriciated for announcing such investor friendly decisions related to attending the meetings through virtual mode. The government should thus leave no stone unturned to let the organisations run under the aegis of the Companies Act 2013 by allowing certain relaxations to enable the organisations adapt to such a change until the pandemic issue settles down