New Guide on Electronic Annual General Meetings
The Companies and Intellectual Property Commission (CIPC) has released Guideline 1 of 2024, which aims to guide companies in holding Annual General Meetings (AGMs) electronically. This update aims to make it easier for companies to conduct meetings in a digital format while ensuring all shareholders can participate effectively.
Applicable sections of the Companies Act No. 71 of 2008:
Public companies must hold their AGMs within specific timelines and ensure they are accessible to all shareholders (Section 61(7) of the Companies Act 71 of 2008).
Companies can hold their meetings entirely online, provided all participants can effectively communicate with one another (Section 63(2) of the Companies Act).
Shareholders must be able to participate and interact without needing an intermediary (Section 61(10) of the Companies Act).
Key considerations when holding AGM electronically:
A combination of written, verbal, and video communication should enhance participation.
A detailed agenda should be provided at the start of the meeting so shareholders know when they can ask questions.
Shareholders should be able to see who else is attending the AGM online and interact with each other.
All board members and executive participants must be visible in real-time throughout the AGM.
For accountants advising companies, these new rules are crucial in helping businesses meet compliance requirements while taking advantage of digital solutions for AGMs.
