The holding of general meetings by videoconference in 2020, due to the restrictions on assembly set up following the Covid-19 pandemic, has undermined shareholders’ rights, denounces the BETTER FINANCE organisation in a new report published on Tuesday 15 December.
“The annual general meeting (AGM) is the cornerstone of shareholder democracy and an essential part of sound corporate governance”, said Guillaume Prache, Managing Director of BETTER FINANCE, at a press conference.
Together with its German association DSW, BETTER FINANCE investigated the measures taken by 11 Member States (Austria, Belgium, Denmark, Finland, France, Germany, Italy, Luxembourg, the Netherlands, Portugal and Spain) in this area.
The report concludes that, in most cases, the actions taken resulted in a violation of shareholders’ rights, including the rights of access to documents, to listen, ask questions and receive answers during the meeting and the right to vote until the end of the meeting.
Among the “worst” cases identified, the report lists, in France, “fake shareholders’ meetings”, which were held behind closed doors, with the exercise of voting rights only possible up to one day before the date of the meeting and with the only legal obligation to broadcast the meeting on the Internet, but not necessarily in real time.
In the future, holding general meetings must return to a format that allows shareholders to exercise all their rights, said Mr Prache.
A survey of several shareholders shows that while they recognise the benefits of videoconference meetings, including accessibility, less environmental impact and lower cost, they agree that physical meetings provide shareholders with a unique opportunity for direct interaction and are generally more transparent. Hybrid general meetings, combining “the best of both worlds” could therefore be the best solution, they say.
See the study: https://bit.ly/3aduHxy (Original version in French by Marion Fontana)