Businesses are facing varying degrees of disruption as a result of the COVID-19 pandemic and the social distancing measures implemented by governments across the world.

Businesses will have to adapt and evolve their practices to ensure that they can continue to operate as effectively as possible in such challenging circumstances, whilst not falling foul of any legal, regulatory or constitutional requirements.

Board meetings

Most boards are accustomed to holding some meetings by telephone or video conference, and electronic communications are generally permitted by the Companies Act 2006. Whether or not it is routine for your business, you should take the following practicalities into account:

• check your articles of association for any specific provisions on telephone or virtual board meetings if you do not regularly conduct board meetings in this manner (for example, references to a ‘place’ or ‘location’ of the meeting may indicate that a physical meeting is required);
• ensure a quorum should be present throughout the meeting as usual;
• consider confidentiality and security when choosing a virtual meeting platform and circulating board packs electronically; and
• minute the meeting as usual, there may be issues with recording the meeting (such as a requirement to obtain consent of all those participating).

If holding a board meeting is not feasible, consider reaching a board decision by written resolution. Again, make sure to check your articles of association as unanimous consent may be required to pass a resolution.

Shareholder meetings

The law does not prohibit shareholder meetings being held electronically and private companies’ articles may also afford them additional flexibility to hold meetings electronically, provided all those participating in the meeting can communicate with each other.

Before deciding to call an electronic general meeting, private companies should:

• check their articles to ensure that they are not prevented from holding a wholly or partially electronic meeting;
• check quorum requirements and any express requirements for physical presence of a quorum in the same place;
• adhere to usual general meeting notice requirements and ensure that the notice is clear that the meeting is being held electronically (in whole or in part); and
• plan the logistics and technical requirements carefully to ensure the meeting runs smoothly.

We can advise companies on appropriate changes to be made to their articles to give them greater flexibility with respect to holding and managing meetings.

Private companies should also consider whether the written resolution procedure may be utilised, if shareholder approval is required for any matter.

This information is part of a series of Harbottle & Lewis Business Law Updates, focusing on legal and business operational issues arising in the current COVID-19 crisis. 

If you have any queries on their content, please contact businesslawupdate@harbottle.com.