July, 31, 2020
The Colombo Stock Exchange (CSE) offered guidance to listed companies on hosting Annual General Meetings (AGMs) amidst the COVID-19 pandemic. The CSE has observed that several Listed Companies had adopted the guidance offered by CSE and successfully hosted virtual/hybrid AGMs. Taking into consideration the feedback received from various stakeholders in this regard, the CSE has formulated an additional guidance note, with a view to elaborate on best practices that may be adopted by Listed Companies when convening virtual/hybrid AGMs.
The Listed Companies are requested to consider the following factors when convening virtual/hybrid AGMs:
Ensuring Equal Access
The model adopted by a Listed Company to conduct it’s virtual/hybrid AGM should be impartial in relation to its shareholders. The CSE has offered guidance with regards to selecting a procedure that would ensure all shareholders equal access to the meeting.
The procedure adopted by listed companies in this connection must allow sufficient opportunities for shareholders to raise questions, concerns, or make brief comments about each Agenda item/Resolution, while being mindful of the time that can be allocated to all the meeting participants. It is recommended that the procedure be made available to all shareholders prior to the date of the AGM via the websites of and the company and the CSE and to also be made available during the meeting to all attendees in-person and virtually.
Companies are also expected to provide reasonable time during the meeting for shareholders to present their proposals or questions/comments related to the Agenda items. A dedicated phone line should also be made available for the shareholders to raise their questions, if they are unable to use/access the technology arranged for this purpose.
The procedure could also specify that shareholders who have already spoken, either in-person or online, wait until all other shareholders have had a turn to speak on a given matter before asking a second question or making a comment. The company could also stipulate instances where questions, taken either in-person or online, would be ruled out of order.
Companies Listed on the CSE are also expected to ensure that the modality adopted in this regard would promote transparency about how questions would be recognized. Companies have been requested to avoid any appearance of, or potential for, bias or preferential treatment with regard to the manner in which the company would screen, organize, combine, prioritize and answer, or fail to answer, the questions received from the shareholders in advance or during the meeting. The method of recognizing questions and comments by shareholders could be disclosed to the shareholders prior to and during the virtual/hybrid AGM and also be made available to its shareholders via the company website and the CSE website.
Companies could also allow its shareholders to present their proposals on a “virtual basis”, whether via a dedicated phone line or pre-recorded or online video presentation. Open video, web lines and telephone lines may be implemented prior to the meeting to allow shareholders to test their access and be able to verify their ability to participate in the meeting.
Listed companies could explore the possibility of hosting all appropriate questions that have been received prior to and during the course of the meeting, and the responses on the corporate website subsequent to the meeting.
Listed companies should pre-register and authenticate all shareholders prior to hosting the virtual/hybrid AGM and have a mechanism in place to permit only those who have been authenticated to vote. A unique user name and password should be provided to each shareholder to login into the webcast of the virtual/hybrid AGM.
Archiving of virtual/hybrid AGMs
Listed companies have been advised to take necessary steps to archive the meeting and its records for the period of time as prescribed by the laws of Sri Lanka.
It is expected that Listed Companies test the reliability of the technology which would be used to conduct the virtual/hybrid AGM and have a contingency plan put in place to mitigate the risk factor associated with a malfunction during the course of the meeting.
It is also advised for companies to make available a technical support line/online help desk for its shareholders who may have questions regarding accessing the virtual/hybrid AGM or experience any difficulty in joining/accessing the AGM.