The corona virus – effects and consequences for annual general meetings in public companies
The outbreak of the coronavirus disease COVID-19 may give rise to challenges for conducting annual general meetings. Travel bans and other restrictions could prevent physical participation in board meetings and general meetings. The convening of general meetings could potentially involve the gathering of a large amount of people. Companies may wish to reduce physical attendance in order to mitigate further spreading of COVID-19. In this newsletter, we discuss the Norwegian law requirements for holding physical general meetings and board meetings and offer recommendations for companies that confront challenges in holding physical meetings.
- According to Norwegian corporate law, Norwegian public limited companies (ASA) are required to hold their annual general meeting within 30 June. Such meetings are required to be held as a physical meeting.
- According to Norwegian securities law and Oslo Børs’ regulations, companies listed on Oslo Børs and Oslo Axess are required to publish their annual accounts no later than four months following the end of the financial year (30 April for most companies). For Merkur Market, the period is extended to five months (31 May for most companies). The Oslo Børs Investor Relations Recommendation stipulates that the annual accounts should be published within the first quarter, unless the company has published a Q4 report within the same date.
- According to Norwegian corporate law, the annual accounts shall be approved by a physical board meeting for ASA companies. This is not a requirement for Norwegian private limited companies (AS).
Most Norwegian ASA companies listed on Oslo Børs and Oslo Axess must therefore have a physical board meeting prior to 30 April. Issuers listed on Merkur Market that are ASA companies must have a physical board meeting prior to 31 May.
In practice, most companies publish their annual accounts in late March or April.
We have below listed certain measures that listed ASA companies may take in order to reduce the required physical presence for board members and shareholders:
- Physical board meeting
In order to form a quorum, more than half of the board members must be present. If a sufficient number of board members are physically present, the other board members may participate by phone or through other means. For example: if the board consists of 7 members, 4 are required to be physically present while the remaining 3 may participate by conference call or video conference. If a board meeting is conducted with an insufficient number of members physically present, but the board still forms a quorum and the proceedings are otherwise adequate, such a formal error is under the current circumstances unlikely to affect the validity of decisions adopted by the board.
- General meetings
a. Proxy forms are required to be attached to the notice of the general meeting. Companies may consider encouraging their shareholders to vote by the use of proxy forms (to the Chairman of the Board or other appointed persons) rather than attending in person.
b. Companies may enable shareholders to vote in writing prior to the general meeting if they have allowed for such voting in their articles of association. Companies may consider encouraging shareholders to do so rather than attending in person.
c. The board may permit and encourage shareholders to participate at the general meeting through electronic means as an alternative to attend in person. Such companies must ensure that there are systems in place so that electronic participation and votes of shareholders may be verified in a satisfactory manner.
d. As a main rule, the company shall hold the general meeting within the municipality in which its registered office is located. However, the meeting may be held outside the municipality where this is necessary for special reasons. Companies may therefore be able to hold the general meeting in another municipality.
e. Webcast solutions could also be considered, to allow shareholders that are not present to participate in the meeting (voting must in such circumstances take place through proxies as per a) or b) above). Companies should plan for the event that certain shareholders will attend the meeting in person and consider appropriate measures, such as placing shareholders with sufficient space between them and carrying out the agenda in a time-effective manner to reduce the time required for holding the meeting. Companies should carefully pay attention to advice from applicable authorities when convening and holding general meetings.
BAHR receives many requests and questions related to effects of COVID-19. BAHR has assembled a special team of lawyers with different expertise, in order to rapidly gain experience on these matters.
Please do not hesitate to reach out to one of our contact persons below for further assistance.