In light of the upcoming annual general meeting season, we have received many questions as a result of the Government's decision. Our view is that an annual general meeting is not such a general meeting as is intended by the government's decision, however, it is a matter where we are still waiting for the authorities' notice regarding interpretation. Consequently, it is not currently prohibited to organize a general meeting/annual general meeting with more than 500 participants. However, in these times it is more important to act as good citizens and there are therefore strong reasons to consider what actions should be taken to reduce the spread of Covid-19. As practical recommendations, it should be mentioned that most companies have taken the following steps:
(a) the annual general meetings are shortened by allowing the meeting to focus on the points where decisions need to be made. Speeches from the chairman of the board and the CEO are published on the website after the annual general meeting;
(b) the possibility of attending the meeting and voting by proxy is highlighted;
(c) handling of outerwear through wardrobe service is avoided. Instead, the companies ensure that outerwear is brought into the meeting room; and
(d) all forms of food and drink, gifts and subsequent mingling are avoided.
*Examples of how General Meetings can be handled in compliance with the Swedish Companies Act
(a) Per capsulam meetings: For companies with a limited ownership, it is possible to hold a per capsulam meeting. The minutes of the meeting with resolutions and appendices are circulated between all shareholders and signed by each, without a physical meeting being held. To hold a per capsulam meeting, it is required that all shareholders who have the right to attend the meeting agree to the form of the meeting.
(b) Deferred meeting: If a company has not yet progressed so far in its planning of the meeting, it may be appropriate to postpone this for a few weeks or months to await the development of the current spread of infection. However, an annual general meeting must be held within six months from the end of the financial year
(c) Continued meeting: If the company wishes to pause a general meeting at short notice to reduce the spread of infection, or if so few shareholders participate in the meeting that it becomes practically impossible to carry out the meeting, it is possible to cancel a meeting that has begun. This decision is taken by a simple majority. However, the annual general meeting must be resumed in time within the six-month deadline from the end of the financial year.
(d) Limited attendance at the meeting: In times of contagion, a solution may be that shareholders limit attendance at the meeting by transferring voting rights by proxy to other shareholders or representatives. However, shareholders (or their assistants) who have registered to the meeting and are registered in the share register cannot be prevented from attending the meeting.
On so-called ”online meetings” and ”hybrid meetings”
According to the Companies Act, the annual general meeting is to be held at the place where the board has its seat. This means that the meeting must be held purely physically and that the shareholders should be able to show up in person. In other words, according to current legislation, it is not possible to hold a meeting solely online.
On the other hand, there is nothing to prevent shareholders from attending the meeting from a different location than where the meeting is held. It thus becomes a hybrid meeting that exists both physically and online. Provided that there is a secure way to check the identity of the shareholder and carry out voting, there are no principled obstacles to such a scheme. On the other hand, the fact that shareholders are only allowed to connect and listen to company management presentations and present shareholders' votes does not mean that they participate in accordance with the Companies Act. It is also important to remember that it is the shareholders who decide whether they want to participate physically or online. Company management only has the opportunity to offer an alternative to physical participation.
In order to be able to attend a general meeting remotely, there is a high requirement for the software used, both in terms of security, identity control, distribution of roles and order.
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