Virtual AGMs might replace physical meetings post Covid

Wednesday July 22 2020

Mr Patrick Bitature, the Umeme chairman and

Mr Patrick Bitature, the Umeme chairman and other directors during a previous Umeme annual general meeting. Companies are seeking to include the option of virtual meetings as an alternative to physical ones. PHOTO | FILE 

By Ashita Chopra

In future, as a shareholder, you might have to make do with the fact that annual general meetings (AGM) will no longer necessarily be physical.

There will be options and most definitely the option will be virtual, not because Covid-19 will still be with us, but because many companies have, during Covid-19, sought or are seeking other alternatives – of course with approval of investors.

Some companies, such as Stanbic Bank, have already amended their articles to include options to the physical annual general meetings, while others will be seeking to do the same when they meet.

“The board may make arrangements to hold and conduct annual general meetings in a virtual and or hybrid manner. In such a way, members attending the meeting in person and or by electronic means can, participate and vote,” an amendment adopted during last Friday’s Stanbic annual general meeting, indicates.

The amendment will give Stanbic Bank options of holding virtual or hybrid meeting in addition to the physical ones, where shareholders gather in a room to deliberate on performance and future investment decisions.

Physical annual general meetings, before Covid-19 disrupted the routine, had been the tradition, held in either hotels or company premises.
But the virtual option could now provide listed companies with an opportunity to save and invest such money elsewhere.

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They will also have the option of hybrid annual general meetings in which a few shareholders are allowed to converge in a room while others attend through an online provisions.

Ms Cathy Adengo, the Stanbic Bank corporate communication manager, says they will continue to hold physical and hybrid annual general meetings but the experience of the virtual meeting lives her excited.

The virtual meeting, which was inevitable due to Covid-19, she says, has helped the bank to host foreign investors, who had to attend from wherever they were thus “covered the inconvenience,” of transporting them amid the ban on aviation.

Covid-19 happened at the time when most listed companies were scheduled to hold annual general meetings.
Thus, because of a ban on meetings, the Capital Markets Authority and Uganda Securities Exchange decreed that companies consider holding the meetings virtually.

Some have already held the meetings and have adopted amendments that will make virtual meetings a permanent stay. Umeme is another company seeking to have the option of virtual annual general meetings adopted.

The company’s board, according to notices sent to shareholders, will during the August 6 meeting put the proposal forward for consideration.
The proposal seeks to empower the board to organise annual general meetings in physical form, virtual form using electronic means or hybrid, which is partly physical and partly virtual.

The amendment, Mr Selestino Babungi, the Umeme managing director, says, will be put to shareholders for approval because it is only them through an annual general meeting that it can be adopted or rejected.
“We have usually had 700 shareholders in a room and we also have some international shareholders, but in future we can have investors participate from Kenya, UK and elsewhere, which kills the window of necessity to be in a room,” he said.

Some analysts say virtual meetings have been happening because of Covid-19 but indications are, companies might stick with the “new normal” to cut back on costs.
Mr Stephen Kaboyo, the Alpha Capital managing partner, believes “virtual meetings are only happening because of Covid-19 but in the long term, due to the diversity of shareholders, it might be difficult to push them into understanding the “new normal”

“Annual general meetings are traditionally physical. People want to be there to listen to how someone is using their money. It is that complicated and I believe it will be in the interest of companies not to interfere with this tradition,” he says.

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