Companies proposing a virtual element to their AGM will need to build in shareholder safeguards and a three-yearly (re)approval vote, or risk an IVIS “red top”, under new IA guidance
The Investment Association (IA) has published a position paper – Virtually enabled shareholder meetings – setting out its members’ expectations for companies considering hybrid or virtual-only annual general meetings (AGMs). The guidance applies to AGMs of companies for financial years ending on or after 30 September 2026.
In the guidance note, the IA reiterates its support for hybrid meetings but in light of the challenges experienced in jurisdictions which allow virtual-only AGMs (including shareholders being unable to be seen or heard, restricted questioning, closed chat functions, and a lack of clarity on unanswered questions), it continues to have concerns about this format (see its December 2017 position statement on virtual-only AGMs).
The guidance note therefore sets out the measures the IA expects to be in place where companies propose a virtual component to an AGM, including:
- Shareholder approval - The IA notes that when shareholders approve changes to a company’s articles to allow the company to hold virtual-only AGMs, the authority is typically granted without a time limit, leaving shareholders with no mechanism to challenge conduct beyond voting against a Chair's re-election. The IA now expects companies to seek reapproval of any virtual element by advisory ordinary resolution every three years, giving shareholders a route to withdraw support if conduct falls short of expectations, and to build this into any proposed amendment to the articles.
- Live participation - Shareholders should be able to speak and ask questions live, and be seen and heard by the board and other shareholders. All directors should be visible on screen throughout.
- Questions - Companies should be transparent about bundling or filtering of questions submitted either in advance or during the AGM, with a full record of submitted questions published afterwards on the company's website (including any unanswered). To facilitate this, the IA says companies could employ an independent third party to manage how questions are moderated.
Companies are expected to confirm in the notice of any AGM that these safeguards will be in place before the virtual element of the meeting takes place.
The IA’s Institutional Voting Information Service (IVIS) will not raise concerns about amendments to articles permitting virtual-only meetings where the company confirms it will follow the IA guidance, including three-yearly reapproval. IVIS will “red top” companies that do not provide these assurances or that fail to seek reapproval every three years.
The timing of the publication of the guidance is interesting, given that the Government is seeking views on virtual meetings as part of its Modernising Corporate Reporting consultation, which closes at the end of November (see our blog post here for further details on the consultation).
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