When the UK Government introduced the Corporate Insolvency and Governance Act 2020 (the Act) in June, the business community and third-sector organisations gave a collective sigh of relief. By allowing certain “qualifying bodies” to legally hold virtual, hybrid or closed meetings in lieu of fully physical meetings, the Act alleviated the stress about how AGMs and other shareholder and board meetings could take place during a global pandemic. Unfortunately, this safety blanket will soon be withdrawn when the temporary provisions of the Act come to an end on 30 December 2020. Whilst the Government may extend the provisions, the Act does not currently allow for extensions beyond 5 April 2021.**Update: the provisions of the Act have now been extended until 31 March 2021**
Now is the time to review your governing documents to make sure you can continue to hold virtual meetings after the provisions of the Act expire. They do not necessarily need to contain an express permission, but you need to be comfortable that they do not restrict the holding of a virtual meeting in any way, whether expressly or impliedly.
To avoid any uncertainty and potential for dispute, we would urge you to use this current period of grace afforded by the Act to amend your governing documents to include an express provision allowing meetings to be held electronically, including by telephone, to give you greater flexibility in future.
This will not only help if the pandemic restrictions continue but now that people are used to attending meetings virtually, it might attract a greater engagement from shareholders/members if they are able to attend meetings from the comfort of their own homes.
The virtual meetings series:
Holding Remote Meetings – Part two of our ‘Virtual Meetings’ series Blog | Hugh James
Do You Need to Hold an AGM? – Part three of our ‘Virtual Meeting’ series Blog | Hugh James
