SGX issues AGM guide to listed firms which factors in health advisories

Singapore

AS two-thirds of listed companies in Singapore prepare for their 2020 annual general meeting (AGM), the Singapore Exchange Regulation (SGX RegCo) on Thursday unveiled a list of precautionary measures on how issuers should facilitate shareholders' meetings amid the Covid-19 outbreak.

Among other things, SGX RegCo encouraged companies to adopt digital tools for the conduct of their general meetings and said it "stands ready to work with them" on this.

"In the interest of public health including the well-being of shareholders, shareholders are strongly encouraged to utilise options available to them to participate in general meetings without attending in person,'' SGX RegCo advised. Those unwell, placed on quarantine orders or stay-at-home notices should not attend AGMs. For directors who are unable to attend the general meeting in person due to travel restrictions, companies should provide virtual options, it said.

Typically, issuers with a Dec 31 financial year-end have up to end-April to hold their AGM. But with the government clamping down on large gatherings to counter the Covid-19 spread, SGX RegCo in February extended that deadline to June 30.

SGX also announced in March a S$5 million SGX Care Package. It includes grants to help companies hold AGMs amid social distancing recommendations as well as travel and visitor restrictions.

Following consultations with the Accounting and Corporate Regulatory Authority (Acra) and the Monetary Authority of Singapore (MAS), SGX RegCo is suggesting ways in which companies can best comply with health advisories while keeping their AGMs open to as many as possible.

The scale of general meetings at any one venue should be capped at 250 persons, in keeping with advice from the Ministry of Health. Video-links could be provided to allow attendees at each venue to participate.

If companies expect 250 or more people to attend their general meetings, shareholders should be provided with alternative arrangements to participate. These include simultaneous webcast of the proceedings, with arrangements to pose questions concurrently where possible. If that is not possible, companies may invite shareholders to submit any questions they may have in advance. Substantial queries received from shareholders can be publicly addressed ahead of the general meeting. Other arrangements include organising virtual information sessions before the general meetings to provide shareholders with a forum to ask questions and engage with management and the board of directors.

Shareholders may appoint the chairman of the general meeting or any other person to act as their proxies for voting at the general meeting. Proxy forms can be submitted by mail or electronically, if provided in the company's constitution.

The Companies Act does not have provisions in relation to virtual meetings, but there are no provisions expressly prohibiting virtual meetings either, Raymond Lam, chief executive officer of DrewCorp Services said.

"Companies Act aside, each company's constitution is different. Most companies' constitution I have seen is silent on virtual or physical meetings but there will be some companies whose constitution has specific provisions in relation to physical attendance by directors and shareholders at a meeting venue. In those cases, the companies would have to comply with those specific provisions,'' Mr Lam said.

Stefanie Yuen Thio, TSMP's joint managing partner, welcomed the SGX RegCo's " well balanced guide on how to handle uncharted waters". She reckoned there is nothing to stop an issuer from holding a physical meeting and letting shareholders tune in via live streaming, for example.

"Those tuning in would not be considered 'present' but they can exercise their voting rights by sending in proxy forms," Ms Thio said.

David Gerald, founder and chief executive officer of Securities Investors Association (Singapore) (Sias), supports SGX's compromise.

"Shareholders have the right to attend AGMs physically and ask questions. However, the hybrid approach now proposed by SGX is supported by Sias given the current situation.

"It is a good compromise between the requirements of the law and predicament of the shareholders. Having the physical meeting with limited attendees and catering for the others through virtual means is a good solution. So long as shareholders can ask questions and are able to participate in the AGMs, their rights are served,'' Mr Gerald said.

Koh Ching Ching, head of group brand and communications at OCBC Bank, said the safety and health of shareholders is of top priority and encouraged shareholders to use the options that will be provided to them to participate in the meeting without attending it in person.

"Some of the options include a live webcast of the proceedings of the meeting; requesting our shareholders to submit their questions via e-mail to us a few days earlier so that responses can be provided during the webcast; and to allow our shareholders to appoint the OCBC Bank chairman, Mr Ooi Sang Kuang, who will be the chairman of the meeting, to act as their proxy to direct their votes," Ms Koh said, adding that details would be shared in due time.

Harold Woo, president of the Investor Relations Professionals Association Singapore (IRPAS), said: "In short, SGX recognises that shareholder voting is a crucial pillar of the corporate governance process, and this guidance ensures that AGMs are robustly conducted yet within the precautionary measures that have been instituted by the government."

MAS, Acra and SGX RegCo are closely monitoring the impact of Covid-19 on the capital markets and will consider additional measures and advisories as necessary.

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