Virtual, hybrid shareholder meetings could be here to stay: SGX, MAS


THE Monetary Authority of Singapore (MAS) and the Singapore Exchange Regulation (SGX RegCo) are open to allowing hybrid and fully virtual meeting formats as a long-term option, should they "be carried out effectively", said MAS's deputy managing director in charge of financial supervision Ong Chong Tee, on Monday.

Speaking at the Securities Investors Association (Singapore), or Sias, Corporate Governance Digital Symposium, Mr Ong said MAS and SGX RegCo will "closely monitor" the experiences of issuers and investors in the conduct of virtual meetings.

At present, companies can continue to conduct their general meetings via alternate non-physical means up till June next year.

He noted the importance for issuers to update shareholders on a company's state and to "complete urgent corporate actions requiring shareholders' approval expeditiously" despite the current curbs.

"What is important is that such new meeting formats should not compromise effective shareholder engagement, allow proper verification of attendees and voters, and facilitate accurate and secure voting processes," he said.

To do so, measures have been put in place to "facilitate informed and effective participation", including a checklist that MAS has published alongside SGX RegCo and the Accounting and Corporate Regulatory Authority on baseline requirements that companies should adhere to.

For instance, companies have to broadcast the meetings by "live" webcast, support proxy voting and allow shareholders to ask questions, and have them addressed ahead of the general meeting.

All substantial and relevant questions, as well as follow-up questions, must also be addressed by the board of directors and/or management prior to, or at, general meetings.

Such requirements seem to have prompted greater participation from companies.

Between April and September, 153 out of 207 companies responded to questions on their annual report posed by Sias - indicating a 74 per cent response rate, up from 20 per cent before.

However, David Gerald, president and chief executive of Sias, said at Monday's symposium that concerns still remain over certain "critical areas".

Only 4.6 per cent of companies had disclosed that their board set the risk tolerance and that there was a risk management policy describing the tolerance for various classes of risk, while 23.9 per cent of companies disclosed their key risks and how these risks were assessed and managed.

Additionally, just 30.2 per cent of companies disclosed their non-financial performance indicators.

"Given the current Covid-19 pandemic and the added stress and risks that companies are faced with, the lack of a risk management policy and guidance of risk by the board can result in mis-managing possible opportunities while under-playing potential threats," said Mr Gerald.

He added that more companies should also disclose non-financial information. Based on research done by Sias, 85 per cent of respondents use non-financial information for their investment decisions.

While the idea of fully virtual meeting formats do not sit well with Mak Yuen Teen, an associate professor at the NUS Business School where he teaches corporate governance, he is open to the possibility of hybrid meetings in the long run.

He said: "Being able to meet the board and management face to face is useful - after all, it is only once a year as far as (annual general meetings) go. It is useful to be able to observe the body language of the board, for instance, which is lost in virtual meetings."

TSMP Law Corporation joint managing partner Stefanie Yuen Thio shared Prof Mak's sentiments, adding that virtual meetings "do not encourage a free flow of discussions".

However, hybrid meetings would offer more flexibility for shareholders, as those who wish to attend can do so, but others who wish to dial in and just listen to the presentation may also do so, she added.

"(This) would probably be an ideal way to marry convenience and effective engagement."

But more still needs to be done to ensure the effectiveness of virtual meetings, should they be conducted via hybrid or fully virtual means.

Prof Mak said there should be "real-time remote voting and real-time electronic communication", as the current format sees "passive webcasts and audiocasts".

Additionally, Ms Yuen Thio said given that questions from shareholders are generally received in advance, to allow for boards to prepare their answers, along with the lack of opportunity for clarification or to ask follow up questions, this has resulted in shorter meetings and less interaction, "which may not be good for effective shareholder engagement on a long term basis".

She added: "During the pandemic, a virtual meeting is a good compromise solution but in the long term, we do not want to sacrifice shareholder engagement for efficiency."


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