New reforms authorise virtual and hybrid company meetings, requiring attendees to have reasonable opportunity to participate.
These temporary reforms are vital to ensuring that the upcoming 2021 AGM season is uninterrupted despite ongoing COVID-19 restrictions across Australia.
In summary:
- Companies are now authorised to hold fully virtual meetings
- There is an increased obligation on companies holding AGMs to ensure that members have a ‘reasonable opportunity’ to participate.
- Companies must ensure that whatever platform their AGMs are held on facilitates two-way audio, so that attendees may participate orally, in situations where they have a right to speak and ask questions.
In more detail:
The Treasury Laws Amendment (2021 Measures No. 1) Bill 2021 was given Royal Assent on 13 August 2021, introducing a number of key changes that will assist in modernising the running of AGMs throughout Australia from 14 August 2021 onwards. Among a number of amendments, the changes include temporarily authorising companies to hold fully virtual meetings of its members.
A key requirement that companies should be aware of when hosting virtual meetings is a new obligation to allow attendees to exercise their right to speak and ask questions orally as well as in writing. This was not previously expected of companies hosting virtual AGMs in 2020.
As such, companies now have an obligation to ensure that whatever platform they are intending to use for their AGM facilitates a reasonable opportunity for members to participate both orally and in writing during the meeting, in situations where they have a right to speak and ask questions. Accordingly, companies will need to ensure that whatever virtual meeting technologies are utilised during their AGM can facilitate two-way audio conferencing as opposed to simply enabling written chat functions.
This new obligation is just one of many new expectations placed on companies to ensure that members attending their AGM’s, as a whole, are afforded a ‘reasonable opportunity’ to participate, regardless of whether the AGM is held virtually, in person or as a hybrid of both. In order to meet the ‘reasonable opportunity’ requirement, companies should ensure the following:
- that the meeting is held at a reasonable time and place (if in person);
- if virtual meeting technologies are utilised, that sufficient information is provided to allow members to participate in the meeting by means of the technology; and
- if virtual meeting technologies are utilised, that they provide the persons attend the meeting, as a whole, a reasonable opportunity to participate without needing to be physically present in the same place.
A failure to provide members with a reasonable opportunity to participate carries the potential of significant consequences, including that the new laws empower aggrieved members to apply to the Court to have the meeting invalidated on this basis.
A number of the reforms that will help facilitate the holding of fully virtual meetings are set to expire on 1 April 2022, however, the Treasury has indicated its intention to introduce permanent reforms later this year that will provide companies with greater flexibility to utilise virtual meeting technologies to hold meetings.
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Automic Group’s hybrid event solution is equipped to ensure participants have a reasonable opportunity to participate.
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