Virtual Annual Shareholder Meeting: Checklist for Readiness | Aprio
How to run a virtual AGM
April 27, 2020
Karen Peacey

Virtual annual shareholder meetings: checklist for boards

We’re all adapting to a world that requires social distancing, remote work, and business conducted by video conference or phone – a shift that’s brought a steep learning curve with it for many. 

As work from home requirements extend from weeks to months, many organizations and their boards are realizing they’ll need to run one of their largest and important events of the year – their AGM – virtually. With the right tools it can be done (and done well). Here’s how to prepare for your virtual AGM during the COVID-19 pandemic and ensure it’s a success.    

How do you run a virtual annual shareholder meeting?

While some organizations have been running board meetings virtually for many years, it’s a new concept for most. And even for organizations that have run virtual board meetings for years, an AGM that includes shareholders as participants is a more complex undertaking with many moving parts. The success of your virtual AGM depends on the conferencing technology and board portal software you choose, as well as your board’s level of preparedness. 

Your board will also need to put itself in the shoes of the people attending your meeting: what tools do you need to give them to ensure the communication and accountability they see during an in-person AGM is replicated during the virtual shareholders meeting? 

Choosing technology for a virtual annual shareholder meeting

There are many video conferencing providers to choose from, including Zoom, GoToMeeting, and Skype for Business. Some solutions have an upper limit for participants, so confirm how many participants your plan choice can accommodate. While some providers offer custom functionality for face-to-face chats, others are better suited to broadcasts or webinars for large audiences, and might be a better fit for a virtual AGM. 

Consider how rigorous the data security and privacy controls are for the videoconferencing tool you choose. Usage of Zoom shot up as COVID-19 spread, and the sudden increase in users exposed some problematic security concerns about the software. Luckily, there are many available alternatives

Virtual annual board meeting evaluation: your eight-part checklist

To plan and run a remote annual general meeting, consider following these eight steps: 

Step #1: Review your bylaws and/or articles of incorporation 

Do your bylaws permit virtual annual shareholder meetings? Do you need to amend the bylaws? How do you determine quorum in a virtual meeting? What happens if you don’t reach quorum? 

Your board will have to consider these questions before hosting a virtual AGM. Your Articles of Incorporation likely won’t spell out whether or not you can have remote board meetings, but the document will tell you whether board members have the authority to amend bylaws. While many boards have explicit bylaws that allow remote meetings and voting, the ones that don’t currently allow it may need to draft an amendment to the bylaws to reflect the change. 

Also, be sure to double check how your organization defines quorum. Sometimes the definition of quorum hinges on members being physically present in order to be counted. 

If any of this is unclear or if your bylaws explicitly forbid remote board meetings, consult your legal counsel to understand your provincial or state laws, as those differ from region to region. 

Man in a virtual annual general meeting

Step #2: Use board portal software to help your directors prepare for the AGM 

Your board portal software should work in tandem with your video conferencing solution to enable efficient AGM preparation. A board portal solution like Aprio helps facilitate both remote and in-person board meetings. You’re able to create and distribute board packets, including financial results and agendas, to board members ahead of the AGM in a secure and timely way. 

Because board members can review their packets in advance, make annotations, and ask each other questions within the portal using a computer or a mobile device. This way, directors can avoid dealing with a flood of back-and-forth emails (and inboxes are crowded enough right now with most of the globe working from home).

A secure portal with end-to-end encryption also means that sensitive conversations about company performance in advance of an AGM stay private and confidential.

Because swift and easy access to documents is crucial during an annual general meeting, many software providers can offer comprehensive training in advance of the AGM, as well as have their support staff ready and on-call during the shareholder meeting itself. 

Step #3: Send out detailed AGM instructions & expectations 

The meeting invitation should include the date and time of the event, as well as instructions on how to log or dial into the AGM. If you’re already running virtual board meetings, you’ve likely already shared your expectations about how a meeting should run. In this case, you should consider sharing these same expectations with your shareholders well in advance. Let them know that the start time is strict. Communicate how they’ll be able to participate or pose questions. Let them know how they can get technical support during the meeting if the conferencing software isn’t working for them.

When it comes to board members who are presenting, make sure to communicate what your expectations are about wardrobe and setting. Depending on the nature of the company and the expected dress code during in-person AGMs, the presenters may want to wear business clothing instead of the casual clothes that many work-at-home employees have embraced. 

Presenters should also be counselled on where to sit in their home (as an example, not in front of a window and not beside a noisy pet) so that shareholders are viewing a background that isn’t distracting. Some video conference software programs allow you to choose a custom background for the presenter. 

Step #4: Practice for the annual general meeting (and then practice again)

Far in advance of your meeting, make sure to test your video conferencing solution to ensure it’s working and that your board members are comfortable using it. If you’ve got directors who’ve never presented virtually before, set up a training session and a practice presentation. Teach your presenter how to share their screen if necessary, take questions (usually via a chat feature), and to mute themselves when necessary. Decide whether or not you’ll appoint a board administrator to manage the presentations and field all questions from attendees. 

Try recruiting three or four board members who won’t mind calling it for a mock shareholder meeting and giving the presenter feedback. A practice run will also give board administrators the opportunity to check that their own computers, cameras, and mics are working and to troubleshoot any issues that come up. Any decks that presenters plan on using during the AGM should be provided to board administrators well in advance. 

Step #5: Ensure equal participation 

When holding remote annual meetings, it’s important that shareholders still have the same access to participate virtually as they did when attending meetings in person. This helps any board maintain good governance. While it’s smart for directors to practice their own presentations, it’s equally important for shareholders to practice accessing the virtual AGM. Offer them guidance on how to test their video or phone access ahead of the meeting, and how they can troubleshoot if they run into any problems. 

Make sure shareholders have equal opportunity to ask questions and hold the board accountable. There has been concern in the past that virtual-only shareholder meetings risk being too controlled by the board or the organization. Communicating openly and honestly with shareholders will alleviate concerns of that nature. 

When it comes to meeting etiquette, virtual annual shareholder meetings could have many participants, so consider muting every participant as a default to avoid constant interruptions. An administrator can un-mute specific directors to let them speak or encourage shareholders to pose questions via the chat function and then read them out. Board directors can then answer the question. Alternatively, participants could pose questions in another forum (via a shared messaging platform such as Slack) and the moderator/host can read them out. Whatever system of communication you choose, make a point of locking down the plan far in advance of the AGM, and then explaining the plan for participation with shareholders when you send out their meeting invitation. 

Woman participating in virtual AGM

Step #6: Create a backup plan 

Internet connections can be spotty. Laptops can fail. A board chair’s mic could cut out. The file for a deck presentation could be corrupted. While it’s unlikely all these failures will happen at the same time, a contingency plan during a virtual AGM is a must. Here are some topics to discuss and plan for in advance: 

  • Having an extra laptop and power cord for board administrators running the meeting
  • Downloading all presentation decks to your desktop in case you can’t access them in the cloud 
  • Discussing what you’ll do if there’s a fire alarm or other emergency in the board chair or administrator’s home 
  • Double-checking WiFi connections and considering using a hardwired ethernet connection as a backup 
  • Discussing what you’ll communicate to shareholders if the meeting is interrupted and can’t move forward.

Step #7: Adapt your voting protocol  

Holding a vote to pass a motion during a virtual annual shareholder meeting is tricky because you can’t ask every individual participant to chime in with a “yay” or “nay.” In this case, consider establishing a new voting protocol where only members who are voting “nay” actually cast a vote. If you have a detailed list of attendees (and proxies), it will be easy to calculate the vote on a given motion by comparing the list with each participant who says “nay.” 

Step #8: Record the AGM and share it 

Inevitably, there will be participants who cannot attend your AGM. Or, there may be shareholders or board members who wish to review what happened once it’s over. In some video conferencing software, you can choose to record automatically when you create the meeting or event. When it’s over, it’s best practice to take the recording, post if publicly, and make that recording available for at least a year. Consider making all the questions and answers from the AGM publicly available as well.

When the AGM is over, ask for feedback

Running a virtual annual shareholders meeting is likely brand-new territory for most boards. After you’ve completed your first one, it’s a wise idea to debrief with the board of directors, the board chair, and the board administrator to discuss what they feel worked and what didn’t. The experience will be fresh in your mind. Also consider sending out an online survey to shareholders so that they might weigh in on their experience voting or sharing feedback with the organization. 

Make a list of what you’d like to repeat (and avoid) so that when AGM season comes around again next year, you’re prepared to run another virtual meeting, depending on the circumstances

Embracing the virtual annual general meeting 

Holding a virtual shareholders meeting requires some flexibility and creative logistics, but it is the reasonable decision to make as we all grapple with an unprecedented public health emergency that’s changed the way we live and work. While an AGM at a computer behind a desk is going to feel much different than an in-person gathering at a banquet hall or conference centre, they can still be just as effective – especially with technology that makes preparation and execution smoother.  

You’ll continue to practice good governance by voting on key issues and being transparent with your stakeholders. You may even consider making remote AGMs a regular occurrence, even after the world has moved on from social distancing. 

Ready to learn how board portal software can help you transition to a virtual AGM? Contact us for a virtual tour.

Ready to learn more about how to run virtual AGMs? Book an Aprio demo

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