The general meeting of a company is the main forum for the shareholders to exercise their right to be informed and ask questions relating to company matters, as well as to participate in and vote on company decisions. The law, having recognized the importance of this forum, makes it mandatory for a general meeting to be held annually and prescribes the manner in which each general meeting must be conducted. The Companies Act of Jamaica (the Act) provides that every company must hold a general meeting each year as its annual general meeting, in addition to any other meetings in that year and must specify the meeting as such in the notices calling it. The Act also goes on to state that no more than fifteen months must elapse between the date of one annual general meeting of a company and that of the next.
Before amendments to the Act in 2021, it inexplicitly provided that a general meeting of a company was to be held in person i.e., taking place with people physically present together in the same place. For e.g., the Companies (Amendment) Act 2017 provides that a quorum is met when a stipulated number of members are personally present at the meeting. In 2020, the Covid-19 virus arrived in Jamaica and in response to this, mandates were implemented by the government under the Disaster Risk Management (Enforcement Measures) Orders to mitigate the spread of the virus. This included mandatory social distancing, limiting the number of persons allowed in a public space and prescribed “no movement” days. Naturally, these mandates made it difficult, if not impossible, for a company to hold their general meetings, especially those with a large number of shareholders. Having become impracticable to conduct general meetings in the prescribed manner, throughout 2019 to late 2021 many companies, pursuant to the Act, applied to the Court for permission to hold their general meetings via an electronic format.
In anticipation of the continuous need for virtual general meetings and conforming to the new age of digital communication, the Act was amended in November 2021 to allow companies to hold both virtual and hybrid (where some members attend in person and others attend virtually) general meetings.
While this modernization of the Act was essential, it was also important that the traditional rights of the shareholders at an in-person meeting were maintained. It is important that shareholders at a virtual general meeting are allowed, for example, to interact, ask questions, vote and participate in real time, as they would do at an in-person meeting. Notable amendments to the Act aimed at maintaining the rights of shareholders include prohibiting the holding of a virtual or a hybrid meeting unless each attendee is able to attend and fully participate in the meeting if he/she attends virtually. This means that a virtual or hybrid meeting will not have full effect as if it was held in person unless, among other things, each attendee is able to see, be seen, hear, be heard, be identified by and be able to identify other attendees and be able to participate in the conduct of the business of the company at the meeting. The Act now also requires companies, when conducting virtual or hybrid meetings, to cause the identity of the attendees to be verified and participatory acts such as voting to be confirmed, to ensure that the conduct of the business of the company is in compliance with the articles of the company and prescribed requirements. The amended Act also defines “show of hands” and “poll” to include a show of hands and a poll through electronic means and goes on to provide that where any person participates by a show of hands or a poll, the previous requirement to be “present in person” is satisfied where either is done by electronic means. A member attending by electronic means will also count to constitute a quorum.
Now that the Act provides for virtual and hybrid meetings, there are also several important advantages and disadvantages for companies to consider. The most obvious advantage is that the virtual option now makes meetings much more accessible since shareholders can attend from anywhere. Since distance and the number of attendees would not be a constraint, this is likely to increase shareholder attendance and participation. . On the other hand, technical issues are always possible and may in some instances disrupt the meeting itself or an attendee’s access to the meeting. Some persons may also not have access to the required technology to attend the meeting and some persons may not be technologically advanced enough to use and understand the electronic platform in which the meeting is held. Regardless of the pros and cons, virtual general meetings are here to stay.