Singapore investor relations body seeks clarity on virtual AGMs amid virus outbreak

THE Investor Relations Professionals Association (Singapore) or IRPAS has recommended an "active dialogue" on how companies can manage virtual annual general meetings (AGMs) while meeting corporate governance requirements.

Its suggestion comes as the Republic's leaders have said the novel coronavirus outbreak might last at least a year. 

"While the technology to allow webcast meetings or vote electronically already exists, there are outstanding issues to be addressed, such as the authentication of proxies and ensuring the privacy of the webcast is sufficiently robust," IRPAS said in a press statement on Monday.

It will thus be ideal if the authorities could set guidelines to provide some assurance to companies, the association added. 

Covid-19 will inevitably bring about a "sea of change in community behaviour", according to IRPAS.

Holding virtual AGMs will allow companies to avoid crowded function rooms that might lead to another Covid-19 transmission cluster.

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However, to do so calls for a review of the Articles of Association - which requires AGMs to be held in a physical location and in Singapore - as well as a review of the Practice Guidance of the Code of Corporate Governance on whether AGMs can be held virtually, said Harold Woo, president of IRPAS.

"There is also the issue of having a quorum. Can one have a quorum in a virtual AGM?" he asked in the statement.

"Covid-19 has presented new challenges for companies, requiring them to clearly articulate the impact on business operations, and messaging to shareholders and stakeholders on steps being taken to prepare for the worsening situation," Mr Woo added.

In the statement, IRPAS also suggested a list of questions for Singapore's investor relations (IR) practitioners to answer, in order to quell shareholders' anxieties about the health of companies in the face of the virus outbreak.

Investors will likely be concerned about practical matters such as AGMs and cancelled business meetings; financials such as cash flow, capital spending, fund raising and sales forecast; and issues relating to business operations such as supply chain disruptions and employee management, IRPAS said.

Regarding AGMs, the association noted that the Singapore Exchange has granted listed companies extensions till the end of June to convene these meetings. Nonetheless, shareholders will want to know whether it is safe to hold AGMs, what steps are being taken if the AGMs must be convened and whether alternatives such as virtual AGMs are available, IRPAS said.

Moreover, many companies have banned all non-essential travel as part of their business continuity plans. IR professionals will thus need to inform shareholders about the alternative ways used by the companies to communicate with clients, customers, the investment community, and overseas clients and colleagues to minimise disruption. Such methods may include webcast meetings.

In terms of financials, the association encouraged IR practitioners to provide information on cash flow, for example by disclosing the companies' contingency plans for the next six and twelve months and any cost-cutting measures.

Investors will also have "pressing and persistent" questions about how the virus outbreak has affected business activity and what steps are being taken by companies to mitigate the drop in such activity, IRPAS said.

As for employees, the association urged IR professionals to "be realistic while also being compassionate and caring for the most important asset of the company".

Internal communication within companies is essential so that the staff will feel safe and are assured that the management is handling the crisis with the company and the employees' interests in mind, IRPAS advised.