Publicly traded companies should go to court for permission to hold virtual AGMs
Dear Editor,
On the 30th June, 2020 I wrote a Public Note to the Board of Directors of publicly traded companies that had postponed/cancelled their Annual General Meetings because of the COVID-19 Pandemic. In that note I pointed out the following #1. That in my opinion while the companies had published notices in the dailies and on social media or had written letters informing shareholders of the postponement of the AGMs it was not a sufficient activity given the reason for the postponement;
#2. That given the great uncertainty and the high level of risks surrounding the activities associated with the COVID-19 pandemic that the Board of Directors of the companies that had postponed their AGMs should give serious consideration to exploring all the legal ramifications that may permit the holding of Virtual Annual General Meetings;
#3. That companies that had postponed their AGMs were in their second and third months of postponement with no end in sight and I believed that the small shareholders had not been updated on what happens next and
#4. That I believed that the Boards of Directors were continuing to monitor something that they had no control over and as a very important corporate body (Board of Directors) that they should undertake an important activity: the preparation for holding a Virtual AGM and I believed that this activity would give them some amount of control and enable them to fulfill a very important governance activity.
Prior to my public note of the 30th June, 2020 I had sent an email to the Chief Executive Officer of one of the Public Companies that had postponed their AGM suggesting that the Board of Directors should give serious consideration and explore the legal ramifications of holding a virtual formatted AGM. I received a reply from the CEO indicating that the matter would have been raised at the June 2020 Board of Directors meeting. We are now in the middle of July 2020 and so far I have not been favoured with an update on the matter.
I also sent an email on the 23rd of June 2020 to the Company Secretary of the Board of Directors of another publicly traded company that had postponed their AGM suggesting that they explore all the possibilities of holding a Virtual formatted AGM for the postponed meeting and I also went a little further and suggested activities that they could undertake to make the holding of a Virtual AGM a possibility.
PS. I also asked the Company Secretary to circulate the email to the Chairperson and other members of the Board of Directors. So far I have not been favoured with an acknowledgement or a reply.
Since my email to the two Public Companies and my Public Note of the 30th June, 2020 on the subject matter I believe nothing different has taken place and in some ways it has gone to a whole new level.
As a matter of fact on the 13th July, 2020 I received a 2019 Annual Report from another Publicly Traded Company and under the Financial Calendar section at the Annual General meeting line no date is given for the holding of the AGM but there is a sentence “To be advised” under proposed dividend payout dates.
Final Dividend 2019. “To be advised” and under First Interim Dividend 2020.” To be advised”.
I believe that because these Publicly Traded Companies have not held their AGMs we have the following situation #1. No adoption/acceptance of the 2019 Audited Accounts;
#2 No declaration or payment of a final dividend (2019) and in some instances no payment of an interim dividend for (2020);
#3. No reappointment or appointment of Directors;
#4. No permission to reappoint or appoint Auditors for 2020. Etc etc etc.
I know that I am a small shareholder in the four Publicly Traded Companies that have postponed or cancelled their 2019 AGMs but I strongly believe that a Board of Directors of a Publicly Traded Company has a legal and ethical duty to act in the best interest of all shareholders regardless of the number of shares owned by any shareholder.
I also believe that the Board of Directors of the Guyana Stock Exchange should be offering guidance covering the area of corporate governance etc, etc to all the listed companies and at the same time monitoring and making certain that all shareholders are treated fairly and ethically regardless of the number of shares owned by any shareholder.
In passing I believe that it is appropriate for me to mention that a highly ranked and best performing Stock Exchange in a sister Caribbean country; which was the 5th best performing ranked Stock Exchange in the world in 2019 as per Bloomberg Ratings; offers very much guidance and support to the listed companies and at the same time monitors the treatment and protects the rights of all shareholders. This Stock Exchange went to the Courts of this sister Caribbean country and I believe that on the June 26th 2020 they were granted an order permitting sixteen listed companies to hold Virtual formatted AGMs.
Two formats were granted.
#1. Holding an AGM with one or more shareholders present at a physical venue with a live stream or broadcast of the meeting by electronic means etc, etc and
#2. Holding an AGM entirely by live stream or broadcast of the meeting by electronic means or software etc, etc. In addition to the sixteen listed companies, individual Publicly Traded Conglomerate Companies domiciled in the same sister Caribbean country have obtained their individual orders from the Courts permitting them to hold Virtual formatted AGMs.
PS. They have had their 2019 AGM and have passed and adopted all the resolutions etc etc etc
They have since mailed out dividend cheques.
In Guyana I believe that some members of the Boards of Directors of the companies that have postponed/cancelled their AGMs may feel protected to just shelter under the laws of the Company Act 1991 and to say that Virtual formatted meetings are not permitted under the Act , as a small shareholder this position is unacceptable.
Given the reasons for the postponement/cancellation of the AGMs I believe that even if there is great improvement in the COVID-19 situation and it results in a loosening of the lockdown situation that the Publicly Traded Companies might never be able to return to the holding of AGMs in the traditional fashion.
These companies have a retainer relationship with top notch high powered attorneys at law and in addition they have very distinguished attorneys on the Board of Directors of these companies and therefore I would like to recommend that they go to the Courts and seek permission to hold Virtual formatted AGMs; the Guyana Stock Exchange should engage the leadership of these listed companies and offer them guidance, support and encouragement to go to the Courts seeking Orders /Order to permit the holding of Virtual formatted AGMs.
Yours faithfully, Dunstan Barrow AA Shareholder