An Annual General Meeting (AGM), is a meeting dedicated to enabling company members or stakeholders and directors to discuss the company and its state of affairs.

AGMs are usually focused on a presentation by the board of directors to explain the financial position of the company.

With a financial report, the board of directors usually discuss the future strategy of the company so that investors have a good knowledge of the direction the company aims to take.

This is one of the few times in which investors can actively participate in company activities by voting on the biggest issues.

AGMs are usually held by public companies, for which legal requirements and scrutiny is higher. In Australian law, public companies with more than 1 member are required to hold an AGM at least once a year.

Private companies are not required to hold an AGM but may decide to do so.

In Australia, the Corporations Act regulates how you must hold your AGM. As a company director, you are required to hold an AGM 18 months after registration and you need to do it at least once a year.

Each organisation has a quorum for the AGM defined in its constitution, with at least two members required to attend.

During an AGM, you must present specific documents including: the annual financial report, the directors’ report, and the auditor’s report.

The AGM provides an opportunity for investors and stakeholders to question the board, and time must be set aside for questions about company management and the remuneration report.

An external auditor may attend the AGM and answer questions from members about the auditor’s report.

Questions must be submitted to the auditor before the AGM in writing to ensure all members have access to the question and the answer.

The maximum legal notice for an AGM is 28 days. An AGM can be organised more quickly if specified in the constitution or if all shareholders agree.

The Australian Securities and Investments Commission (ASIC) has adapted to the outbreak of COVID-19 and authorised the holding of virtual AGMs using the proper technology.

This opens the door for a large number of organisations to run their AGM online, if permitted by their constitution.

Virtual AGMs reduce the need to conduct a physical AGM in an external location, eliminating venue hire costs and risks to members from face-to-face attendance.

Board members may also connect remotely, reducing travel costs.

Virtual AGM technology platforms are well-suited to the feedback and participation requirements of AGMs and increase accessibility, and enable organisations to reach shareholders wherever they are located.

Your AGM can also be performed as an hybrid event, which means that the quorum may be achieved in a physical meeting and linked to all other members online.

Data is also available after the event on online attendees, duration of views and engagement during the proceedings.

ASIC has extended new guidelines allowing corporations to hold virtual-only AGMs, and will not take action if an AGM is held up to seven months after year end for entities with a balance date up to 7 July 2020.

This may be extended further.

The most important requirement for a virtual AGM is to provide members with the opportunity to participate as much as possible.

The virtual meeting should be adapted to guarantee members effective interaction with the board, including the opportunity for members to ask questions live, and to provide comment or participate in debate during the AGM.

During the meeting process, members should be able to make the most informed decision possible.

ASIC advises that voting should be made possible by a poll rather than a show of hands.

Since the process of holding virtual AGMs is new to many, members must be given sufficient notice in order to understand how to use the technology to observe, vote, make comments and ask questions.

Virtual AGMs sometimes use technology that can be unpredictable.

For this reason, ASIC advises the users to test the chosen platform in advance of the meeting.

Backup solutions should be put in place to overcome technical issues that might arise.

You need to be clear and concise about your communication in the case of technical issues.

If technical issues arise that prevent members from attending, the AGM should be adjourned until the issue is fixed.

Yes, ask us how proxy voting to be conducted as part of a virtual AGM.

Keep in mind, you must ensure your constitution allows for online voting.

We recommend a budget of about $10,000 including electronic proxy and live voting options.