90% of business leaders said company law should be amended temporarily during the Covid-19 crisis to allow virtual AGMs to be held without the need for a company to amend its Constitution, according to a recent snap poll, comprising CEOs and company directors.
The passage of the Companies (Miscellaneous Provisions) (Covid-19) Bill 2020 addressing the many issues facing companies trying to comply with, in particular, the Company Law requirement to hold AGMs during the current crisis, as detailed in Section 6 of the Bill, has been welcomed by The Institute of Directors (IoD) in Ireland, who had been lobbying for the change.
The Bill will now go to the President to be signed into law.
The IoD also recommended in their correspondence to former Minister for Business, Enterprise, and Innovation, Heather Humphreys TD, and the Office of the Director of Corporate Enforcement (ODCE), that any new legislative initiative on the issue should be applicable for what it termed, “the current period of uncertainty during the Covid-19 crisis”.
Holding an AGM is essential for many companies in terms of meeting their governance responsibilities as well as complying with the regulations under Company Law.
Holding an AGM provides accountability to shareholders and allows for the approval of the annual accounts in addition to meeting other requirements.
Maura Quinn, Chief Executive of the Institute of Directors in Ireland, said: “The passage of the Bill is to be welcomed and is a recognition that the views of business leaders have been taken on board.
"Physical AGMs have proven very difficult during this period, so it is appropriate to make virtual AGMs acceptable across the board and their decisions and motions legally binding and effective, where applicable.
“It is vital, too, to ensure interactive shareholder involvement in these meetings. Many companies could not change their Constitutions to provide for virtual AGMs without holding an AGM or EGM in the first instance.
"That Catch-22 situation is, thankfully, being resolved and it removes – at least until the end of this year – one of the many headaches facing business leaders in the current crisis.”
Maura Quinn also welcomed the extension until the end of this calendar year of the timeframe by which AGMs must be held (where otherwise they should have been convened earlier). This is in line with a European Commission proposal.