Singapore investor relations body seeks clarity from authorities on virtual AGMs

Singapore

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.

The introduction of virtual AGMs will require a review of the Articles of Association requiring 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.

There is also the issue of whether a quorum is possible in a virtual AGM, said Harold Woo, president of IRPAS.

Responding to queries by The Business Times on Monday, Mr Woo said the industry-wide dialogue could take place between authorities including the Singapore Exchange (SGX) and other listed companies, as well as firms that provide corporate secreterial services and scrutineers at AGMs.

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.

"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.

Investor concerns would include operational matters such as curtailed business meetings and supply chain disruptions, as well as financial matters such as cash flow, capital spending, fund raising and sales forecasts, IRPAS said.

IR professionals should, for instance, inform shareholders about the alternative ways used by companies to communicate with clients, customers, the investment community, and overseas clients and colleagues to minimise disruptions.

In terms of financials, IRPSAS encouraged disclosures on contingency plans for the next six and 12 months as well as 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.

Communication within companies is also essential, so that 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.