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Since the first entirely virtual meeting at Jimmy Choo plc’s AGM on 15 June 2016, which triggered significant debate regarding the fairness and effectiveness of virtual participation in meetings, the format of shareholder meetings has changed dramatically. The catalyst for these changes was primarily the temporary safety restrictions introduced during the coronavirus (COVID-19) pandemic, which led to the widespread normalisation of both hybrid* and virtual** meetings across the UK corporate landscape. Such practices seem to have outlived the restrictions implemented to combat the virus, with 73 FTSE 350 companies adopting a hybrid format for their AGMs out of a total of 184 (40%) so far during the 2022 AGM season. In addition, four companies, all from the FTSE 250, have chosen this year to adopt an exclusively virtual format (2.2%). The four companies are as follows:

Although the first two notices were disclosed when the UK had coronavirus restrictions in place, of particular note are the much more recent notices of Clarkson plc (Clarkson) and ContourGlobal plc (ContourGlobal). Clarkson, which also held virtual AGMs in 2020 and 2021, justified the virtual format of its AGM this year on the grounds of ‘continued uncertainty, and to encourage shareholder participation’. This is despite the fact that coronavirus restrictions in England are no longer in place, and one of the main of virtual meetings from investor bodies is that they meaningful engagement with shareholders, especially for retail investors, and often ‘inhibit shareholders’ ability to present proposals and escalate concerns’.

This viewpoint was aptly in the Investment Association’s (IA) position statement back in 2017 before the coronavirus pandemic, which is still in the guidance section of the Institutional Voting Information Service’s website:

‘The AGM is the only time that the Board must be publicly accountable to all its shareholders. The attendance of the Board to such meetings is a demonstration of their commitment to understand the views of shareholders.

“Virtual-only” AGMs remove this accountability due to the remoteness of participants. Investors believe that the public nature of AGMs and full attendance of the Board is important to allow them to bring matters to the Board’s attention. Removing this tool impairs the ability of investors to hold Boards to account on behalf of their clients.

It is harder for participants to identify the views of fellow participants in a virtual-only format, and to register agreement (or disagreement). Companies who adopt a “virtual-only” approach may also risk giving the impression that they are attempting to filter questions or participation of shareholders and do not want to be subject to the questions of their shareholders.’

Despite the coronavirus pandemic and the general change in attitudes to hybrid and virtual meetings, the IA are yet to update its guidance on the subject.

It is also worth noting that ContourGlobal stated that the virtual nature of its and AGMs were ‘as a result of the rapidly evolving coronavirus situation and the stay at home measures introduced by the UK Government’ and ‘as a result of the coronavirus situation and the measures in place in the UK at the time of the publication of this document’ respectively. However, as the effects of the coronavirus pandemic wind down, ContourGlobal’s 2022 notice instead states, rather unclearly, that the company intends to hold a virtual AGM in order to ensure ‘that shareholders who wish to attend the AGM are able to do so’.

The company goes on to note that its ‘articles of association permit us to hold an electronic AGM and we have decided to make use of this provision’, which in turn raises the question as to whether such meetings, allowed under article amendments introduced at the height of the coronavirus pandemic, will now become the normal state of affairs for some companies post-coronavirus. This is precisely what the Pensions and Lifetime Savings Association (PLSA) against in its 2021 Stewardship and Voting Guidelines:

‘Prior to Lockdown, investors had not been supportive of virtual AGMs, and there is a certain apprehension that this period will result in virtual meetings becoming a permanent feature of AGM season…The PLSA supports the provisions introduced by the government and companies to ensure that AGMs can happen virtual during these unprecedented times. However, given concerns about how this may reduce investor engagement, we would advise against voting against any motion that would make virtual AGMs permanent, rather than specifically linked to Government policy, or with a sunset clause attached. We would encourage investors to seek assurances from companies that they are looking at how to use virtual AGMs to not only protect investor engagement opportunities, but increase them.’

PLSA is not alone. While various institutional investor groups generally have been supportive of hybrid meetings, it is often the case that they see virtual meetings as a step too far. For instance, proxy adviser Institutional Shareholder Services the following in its 2022 UK and Ireland Proxy Voting Guidelines:

‘While there is recognition of the potential benefits of enabling participation at shareholder meetings via electronic means, investors have raised concerns about moves to completely eliminate physical shareholder meetings, arguing that virtual meetings may hinder meaningful exchanges between management and shareholders and enable management to avoid uncomfortable questions.’

The aversion of shareholders to virtual meetings is also discernible in the various resolutions amending company’s articles that were put forward during the 2021 AGM season, with some companies going as far as to clarify that their ability to hold hybrid meetings will not allow them to hold virtual meetings. For example, Beazley plc’s notice of its 2021 AGM the following:

‘The Board believes that offering shareholders a choice to participate in general meetings either in person or electronically offers a positive solution both for those shareholders who are unable to attend in person and for the Company, allowing meetings to be conducted in times where physical participation may be prevented or restricted. To make it easier for the Company’s shareholders to take part in future general meetings and to increase shareholder engagement, the New Articles permit the Company to hold ‘hybrid’ general meetings where shareholders have the option to attend and participate either in person (in a main location or in specified satellite locations as currently provided for by the Existing Articles) or virtually by electronic means. The New Articles will not permit the Company to hold wholly virtual general meetings.’

In addition, the three resolutions to amend the articles of association put to shareholders during the 2021 AGM season that did consider the possibility of allowing for virtual meetings were carefully worded in order to satisfy investors that the provisions to implement virtual-only meetings would be used exclusively under unusual circumstances. For example, according to BMO Commercial Property Trust Ltd’s 2021 :

‘While the New Articles (if adopted) would permit shareholder meetings to be conducted using electronic means, the Directors have no present intention of holding a virtual-only meeting. These provisions will only be used where the Directors consider it is in the best of interests of shareholders for a hybrid or virtual-only meeting to be held. Nothing in the New Articles will prevent the Company from holding physical shareholder meetings.’

Virtual meetings are also controversial in corporate law insofar as there remains some legal uncertainty in relation to whether virtual meetings constitute a valid meeting, given that their virtual nature would characteristically preclude a quorate number of participants being physically present in a single location. This uncertainty is noted in the Chartered Governance Institute’s (CGI) 2021 , with the organisation recommending that appropriate advice should be sought by companies on the subject (for more information, see Practice Notes: and ).

During the coronavirus (COVID-19) pandemic, this problem was temporarily circumvented via the (), which allowed for a meeting to be held without a quorum of participants having to be together in one place (for more information, see Practice Note: ). However, the relevant provisions in expired on 30 March 2021.

There is also the question of (), which requires that a general meeting notice state ‘the place of the meeting’. This has led some to that precludes virtual meetings on the grounds that notices cannot define what this place will be without inevitably wandering into the realm of the intangible (ie online, cyberspace, etc).

For more information on recent trends in hybrid and virtual meetings, as well as analysis of the 2021 AGM season, see our recent Trend Report: The evolving AGM: adapting to change—Market Tracker Trend Report.

*We define a hybrid meeting as one in which shareholders are able to view the meeting while being either physically present at the place of meeting or electronically (eg online or via phone) in real time. This definition therefore excludes meetings whereby electronic recordings are disclosed after the event has taken place.

**We define a virtual meeting as one in which shareholders are able to view the meeting exclusively through electronic means in real time.