As we move further into a digital-first era, many UK companies are rethinking how they engage with shareholders, particularly when it comes to shareholder meetings. What was once a purely in-person affair has evolved rapidly, with hybrid and virtual meetings now firmly part of the conversation.
With innovation comes legal complexity. Companies must balance convenience and accessibility with compliance and shareholder rights.
What are hybrid general meetings?
A hybrid general meeting allows shareholders to attend either physically or virtually, combining the benefits of face-to-face interaction with the flexibility of remote access. These became more popular during the COVID-19 pandemic and have remained a fixture due to their practical advantages.
By contrast, fully virtual general meetings (i.e. conducted entirely online) remain controversial in the UK as uncertainty remains about whether such meetings would constitute a valid shareholders' meeting.
Legal framework: where things stand
The Companies Act 2006 does not expressly prohibit hybrid or virtual meetings, but the permissibility depends heavily on the company's articles of association. Case law and guidance from bodies such as the Chartered Governance Institute (ICSA) confirm that:
- Hybrid meetings are generally permitted where the articles do not prohibit virtual participation and require physical presence at a single location for the meeting.
- Fully virtual meetings are only valid if explicitly authorised by the articles.
In practice, due to the global nature of businesses today, many companies have since amended their articles to specifically permit hybrid meetings and to set out the procedural details of the holding of those meetings (including procedures in the event of a technical failure).
Before holding a hybrid or virtual general meeting, it is essential that companies review their articles to confirm whether such hybrid or virtual formats are permitted. If not, you may want to consider passing a special resolution to adopt updated provisions.
Shareholder rights: access, participation and voting
One of the main concerns with hybrid and virtual general meetings is the risk of undermining shareholder rights, particularly for minority shareholders. Key areas to consider include:
- Notice requirements: notice of the meetings must clearly explain how shareholders can attend and participate, including login details and technology requirements.
- Equal participation: virtual attendees must be able to ask questions and vote meaningfully, mere observation is not enough.
- Technical failures: if shareholders are excluded due to technical problems, this could invalidate parts of the meeting or give rise to legal challenges.
The best practice would be to run a dry-run of the technology, use a reputable platform with voting functionality, and provide clear instructions well in advance.
The role of the chair and corporate culture
Hybrid meetings require a more proactive chair to balance input from both physical and virtual attendees. Clear rules on asking questions, submitting resolutions, and dealing with connectivity issues should be circulated in advance.
This shift is also an opportunity to modernise governance culture, showing commitment to inclusivity, transparency, and shareholder engagement.
Practical steps for companies
To prepare for hybrid or digital general meetings, we recommend:
- Reviewing the articles of association to confirm the company's powers to hold hybrid or virtual meetings.
- Updating the articles if necessary, via shareholder resolution.
- Choosing the right technology platform, ideally one that integrates video, live Q&A, and secure voting.
- Providing comprehensive AGM notices, including details on how shareholders can join and participate.
- Training board members and the company secretary on chairing and managing hybrid meetings effectively.
Final thoughts
The shift towards hybrid meetings reflects broader changes in how businesses operate and engage with stakeholders.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
