Since the COVID-19 pandemic, there has been a surge in annual general meetings (AGMs) and board meetings being held remotely. During the pandemic, the UK government implemented temporary regulations permitting remote meetings, although these regulations have since lapsed. While some companies have returned to physical meetings, many continue to operate virtually or in hybrid formats.
There are currently three types of AGMs and board meetings:
- Physical meetings: Where participants gather at a designated location for face-to-face interaction.
- Virtual meetings: Where all participants join via video conferencing, with no physical gathering.
- Hybrid meetings: Where some participants meet in person and others join virtually.
For some companies, physical meetings remain more suitable, particularly when managing large numbers of participants or coordinating complex technical requirements for virtual attendance. For others, factors such as travel expenses, or the geographical distance of attendees make virtual or hybrid meetings a more practical option.
Virtual meetings and the Companies Act 2006
While remote participation in meetings has been technically possible since the advent of the telephone, the legality of fully remote meetings under the Companies Act 2006 (CA) remains somewhat ambiguous. Section 311 of the CA specifies that a notice of a general meeting must indicate the “place” of the meeting, leading to questions about whether this must be a physical address or can encompass a virtual space. The prevailing interpretation suggests that “place” may be interpreted broadly enough to include virtual locations. Nonetheless, it is essential to note that, for legal compliance, shareholders or directors (as the case may be) must be able to hear the meeting, communicate, and vote in real-time during the session. Additional requirements apply to public companies under the CA and we recommend that you contact us separately if you need advice in that regard.
Virtual meetings and articles of association
Companies should review their articles of association to confirm there are no prohibitions or restrictive wording regarding virtual meetings. This is particularly relevant for older companies which may be relying on previous versions of model articles that could inadvertently include such restrictions. If amendments are needed, new or revised articles
can remove prohibitions. Additionally, companies should consider adding clauses that address electronic meetings, including contingencies for technical failures, which would allow the chair to postpone or reschedule the meeting as needed. These provisions help ensure that meetings are conducted in accordance with their articles of association and the CA.
Risks of Non-Compliance
It is essential for companies to hold meetings in accordance with the CA and their articles of association. Failure to comply may lead to the meeting being invalidated, with potentially significant consequences for corporate governance and decision-making.
Please get in touch with a member of our corporate team if you would like us to review your articles of association to include hybrid/ virtual meetings, or if you would like any other advice on preparing for board or shareholder meetings.
