The Time for the Virtual AGM Is Now. Here’s Why Your Company Should Consider Taking It Online

The Time for the Virtual AGM Is Now. Here's Why Your Company Should Consider Taking It Online

What happens to meetings when you are literally not allowed to meet anyone? They get postponed, probably, or turned into emails. But when it comes to listed companies, there are some meetings you can’t simply put off. 

The Annual General Meeting (AGM) is a regulatory obligation as well as a necessary milestone, as shareholders are called upon to vote on important issues that require their approval, from the appointment of directors to key business decisions. With people turning to video-chatting solutions for both personal and business cases due to COVID-19 restrictions, the next logical step for issuers is to try to hold their AGM online. But this might be easier said than done.

AGMs in the Time of Coronavirus

Even as some companies are exploring the potential of virtual AGMs, the onset of the pandemic has caught several more of them flat-footed. Far from being ready to take the necessary steps to move their AGM online, many companies have no clear plans regarding their AGM at all.

To get an idea of how companies are responding to this challenge, Smartkarma put together a mini-study of over 200 companies, gathering publicly available data from official websites, exchange filings, and third-party aggregators.

Most of the companies we studied (34 percent) have rescheduled their AGM to a later date, while 26 percent have not changed their plans yet. Another 24 percent have yet to announce what they will do, and the remaining companies have either already held their AGM, held an extraordinary general meeting, or have provided no details.

Notably, from this sample, only 14 companies already held a virtual or a hybrid AGM (which offers the possibility of both in-person and remote attendance) – 11 and three, respectively.

Our sample covers three major markets (Singapore, Hong Kong, Indonesia) as well as companies from a range of other markets, including the US, Japan, India, Southeast Asia, and Australia.

The Singapore sample is especially important considering the Monetary Authority of Singapore (MAS), the local regulator, and SGX have announced that companies can have a 60-day extension to hold their AGM, if it was scheduled between 16 April 2020 and 31 July 2020.

Depending on when the company’s financial year ends, the deadline looks like this:

Company A

Company B

Financial year ends: December 31
Financial year ends: March 31
AGM must be held by: April 30
AGM must be held by: July 31
Extended to: June 30
Extended to: September 31

One of the reasons why so many companies are still holding back is that switching to an all-virtual AGM or a hybrid one can be tricky. Experts warn issuers to ensure they conduct their virtual AGM in a compliant way, according to guidance issued by regulators like the SEC in the US and MAS in Singapore. 

Issuers are also advised to consider moving quickly to hire a vendor to conduct their virtual AGM, since demand for such a service during the pandemic is sure to increase. SGX has even announced a S$5,000 (US$3,534) grant to assist companies listed on its Mainboard and Catalist boards with their virtual AGMs.

The grant is meant to cover expenses including, “amongst others, expenses incurred to book additional meeting rooms and additional teleconference lines, implement webcast or other virtual solutions, or rent additional equipment to manage healthcare screening entry and contact tracing.”

How Can Smartkarma Help?

So why should you consider Smartkarma as your go-to vendor for your virtual AGM? For one thing, our Corporate Solutions suite of services has helped issuers streamline their investor relations processes online. Corporate Solutions gives clients a host of tools to promote their company, target and connect with global institutional investors and leading analysts, view analytics, and facilitate contact with independent research providers.

Now we can apply that expertise on assisting with your virtual meeting. These are some of the key features we can offer your company in this regard:

The Time for the Virtual AGM Is Now. Here's Why Your Company Should Consider Taking It Online

Another reason is that, while the main push for virtual AGMs at the moment is the COVID-19 pandemic, there’s no reason to stop there. Shareholders often find it difficult to attend physical AGMs, whether because of distance and cost, time constraints, or other reasons. This can result in low turnout for many of them, and exclude several shareholders who are not able to participate.

The COVID-19 pandemic is challenging several preconceptions of how to conduct business, and the AGM may well be one of them. Even the likes of Vanguard have endorsed the virtual AGM as a potential necessity during this time, saying that they “welcome the use of virtual meetings or other options that ensure that shareholders’ voices are heard.”

In many ways, this is the perfect opportunity to take advantage of the expertise of a service provider like Smartkarma, to future-proof your key meetings.

Find more information here on how the Corporate Solutions team can help you hold your own virtual AGM. You can also sign up for a FREE Corporate Solutions account. Get in touch with the team directly at [email protected]

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