02 Feb Changing your articles of association for a virtual AGM
Holding a virtual AGM or hybrid approach during the covid pandemic is a particular challenge for company secretaries.
The Corporate Insolvency and Governance Act 2020 (CIGA) allows companies to hold virtual AGMs and general meetings despite restrictions in their articles. However, these provisions in CIGA are due to expire on 31 March 2021 (although they have been extended previously and may be again). Once these do expire, company secretaries will need to comply with the provisions in the articles.
There’s a plethora of articles online advising companies of the need to change their articles of association to permit a virtual AGM or at least hybrid general meetings in the future. Here’s some help on some of the specific changes you should consider (assuming your articles are otherwise up to date):
- Consider whether you want to permit wholly virtual or only hybrid meetings in addition to physical meetings. If including wholly virtual, consider viewing articles of Jimmy Choo which held such a meeting prior to being taken over. However, you should note that many investor bodies currently do not support virtual only meetings after the pandemic, as they believe it will restrict the ability for shareholders to engage with the board.
- Definitions: define “hybrid”, “virtual” and “meeting” to include both in addition to physical meetings.
- Update or add articles on the following which are likely to be affected: Annual General Meetings, Convening of General Meetings, Simultaneous attendance and participation by electronic facilities, Notice of General Meetings, Contents of Notice of General Meetings, Postponement of General Meetings, Quorum, Security Arrangements, Entitlement to Attend and Speak, Adjournments.
- Read through the proposed amendments to ensure changes to the articles of association are consistent.
- Update article cross-references throughout the document.
- Update the table of contents and page numbers, ideally using the ‘update table of contents’ tool if using Microsoft Word.
Other recent unrelated best practices you may wish to consider amending include referring to the chair in a gender-neutral fashion and including an article on the destruction of documents.
Elemental has supported a number of clients during the covid pandemic and would be happy to assist you with updating your articles of association or reviewing your suggested changes to ensure they are compliant. Elemental also provides a full range of other AGM and company secretarial services. Please do get in touch with the team to discuss.