5 Key Benefits & Considerations for Virtual AGM in the New Norm

 

At the height of the COVID-19 pandemic, there was a sharp turn towards holding Annual General Meetings (AGM) virtually. Since then, many businesses have seen several benefits that a virtual AGM can offer compared to physical AGM attendance. Today in our endemic phase, virtual AGMs continue to gain traction and have become the preferred choice for many companies. 

AGMs are usually held in accordance with the requirements under the Companies Act  to  present the company’s financial performance and to seek shareholders’ votes on current issues of the company such as appointments of the board, board remuneration, dividends payments and the appointment of auditors. 

In many instances, it has also become a sole opportunity for shareholders to engage with the Company Directors and enquire regarding the Company’s business activities and financial status. An AGM is a formal and important affair required by law in many countries, including Singapore and Malaysia. 

Read more: 5 Reasons Why You Should Outsource Company Secretary Instead of Hiring 

Are Virtual AGMs Legal & Digitally Secure?

A virtual AGM is when an Annual General Meeting is conducted via a televised or video streaming function that connects the company’s top management with their shareholders over a virtual platform. 

Yes, virtual AGMs are allowed under the regulatory requirements of Malaysia and Singapore. Sparked by health measures brought by the pandemic, it is now permissible for registered organisations to conduct AGMs virtually for the foreseeable future. 

Companies have no need to worry about the security and integrity of virtual AGMs, provided the technology or method utilised enables the members of the company to participate and exercise their rights to speak and vote at the meeting. Today’s virtual AGMs are highly secured, with most video streaming technology platforms equipped with modern, state-of-the-art encryption techniques to ensure data protection. 

To fortify this security further, some companies have upgraded their digital safety standards to include firewalls and other features that make it almost impossible for hackers to hijack or tamper with the virtual AGM.

Key Benefits of Conducting Virtual AGMs 

Why are companies of all sizes and industries moving their Annual General Meetings from boardrooms to computer screens? Let us look at the advantages virtual AGMs can offer:

1. Eliminate Geographical Boundaries 

A virtual AGM is most suitable for organisations where the shareholders are dispersed in a wide range of geographical locations. There is a lot of advanced preparation to be done before an AGM, more so when the participants are located in different countries.

Virtual AGMs eliminate all the logistical challenges to physical arrangements such as venues, accommodation, seating arrangements and others. Cross-border AGMs can be made easier and less hassle when done virtually. 

2. Easy on Budget 

A virtual AGM can reduce a considerable amount of costs compared to physical AGMs. There are a lot of plans and budgets to be allocated, including venue bookings, catering, accommodation for the participants and many more costs.  

By adopting a virtual AGM, the travel and accommodation costs will be reduced because shareholders can take part actively from anywhere in the world. This would ultimately lead to greater cost savings for the organisation without jeopardising the overall experience of an AGM.

3. Maintain Participant’s Engagement 

Virtual AGM platforms would usually have features that can maintain if not improve engagement with participants. They can ask questions before and during the event, draw their votes, generate text-to-speech subtitles, and many more technological features of a virtual AGM. All this helps to enhance the overall participant and shareholder engagements and promote a richer discussion.

Most virtual AGM tools also possess e-voting capabilities. This can be done either by sending the participants a custom voting link or by having a dedicated e-voting feature on the software that allows participants to vote instantly. All these features would necessarily need to be highly secured. As such, these virtual platforms are usually equipped with backup channels, ISO-certified security features and customer support. 

4. Better Time Management & Control

It can be said that virtual AGMs are better for timekeeping and management. Unlike a physical AGM, virtual AGMs usually start sharp on time because it is better coordinated. Pre-AGM networking sessions, for example, are better controlled to not go over the time as per schedule.  

Depending on the platforms used to hold the Annual General Meeting, there are other features to keep time and give the organiser better control. This includes timers and time reminders, attendance tracking, nominee management, and more. 

5. Greater Transparency & Accuracy 

Having your Annual General Meeting virtually provides an opportunity for better transparency and accuracy because every activity is recorded. The session itself will be recorded into a video, and everything discussed will be documented and made accessible. With everything managed digitally, lengthy paperwork can be reduced. E-votes are counted digitally as well, leaving little room for error and ensuring everyone is accounted for.

Conclusion

Whether it is done virtually or in person, Annual General Meetings are compulsory for every registered organisation in a local jurisdiction. With new work habits and flexibility increasingly in demand, virtual AGMs might be here to stay. Soon, more companies will make the permanent shift towards a virtual setting where participation is remote, but still in line with regulatory compliance. 

Talk to Ledgen Group about managing a virtual AGM and how it can be done in compliance with local regulations. Our team of capable professionals have extensive experience in corporate secretarial matters in Asia. 

Learn more about Ledgen’s corporate secretarial services today. 

 

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