Virtual AGMs will be a ‘thing’ in SL
Companies across the world have been forced to alter their plans for their annual meetings in response to restrictions on mass gatherings aimed at halting the spread of coronavirus by the government. So this year, at least, some familiar sights on the corporate calendar will disappear.
The beginning of AGM season coincided with the nationwide shutdown with several public companies having scheduled the conduct of their Annual General Meetings (AGMs) virtually after the Colombo Stock Exchange (CSE) sent a guidance note to firms on such meetings.
Pan Asia Bank said it has rescheduled its 25th Annual General Meeting (AGM) and the Extraordinary General Meeting (EGM) as virtual meetings. “It will be on 16 June, 2020 at the boardroom of the Bank, in Colombo 3 starting at 9.30 a.m. under the guidelines issued by the CSE on holding virtual shareholder meetings in light of the COVID -19 pandemic,” Pan Asia said in an announcement to the CSE. Sampath and HNB will follow suit while Commercial bank is yet to decide.
In late March the CSE said in a statement that Listing Rules of the CSE do not contain specific provisions relating to the date on which an AGM is to be hosted by a firm. “As such, Listed Entities will be required to comply with the applicable provisions set out in the Companies Act and the Articles of Association of the Entity in this regard,” it said. The CSE has formulated a Guidance Note intended to act as a guideline for Listed Entities setting out the possible approaches that may be adopted by firms in hosting the AGMs amidst the restrictions brought about by the COVID-19 pandemic.
Offering shareholders the opportunity to participate online means they can participate from anywhere regardless of their location, making the meeting far more accessible to the vast majority of shareholders who are unable to attend physically, a company CEO said. He also commended online meetings saying there will be less travel by shareholders and the board so this consequently saves time and money for all. He added that now virtual meetings will catch on in the country. Another CEO of a listed firm said AGMs would now be modernised through technology.
However some shareholders aren’t happy as there’s no opportunity for them to question the board in real time. Smaller retail shareholders could lose out in particular as this is the only time retail investors have an opportunity to ask questions.
The opportunity to interact with management would be missed, they said. While some use the meeting to touch base with the management, others use it to showcase their oratory skills. That, the management won’t miss this time.