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Holding AGMs during COVID-19

The following notes have been taken from an Associations Forum Governance Webinar, held on 28 April 2020, Chaired by Kathy Nguyen, Associations Forum.

When considering your options for AGMs, you must ensure there is a reasonable opportunity for members to participate ie. hear speakers, make comments, ask questions or vote.

Your options include:

  • Postponing the AGM
  • Holding a virtual AGM

Eligibility

1. Check your constitution

2. If it is silent, check the regulator websites

3. For companies limited by guarantee with December year-end, ASIC:

     a. will take no action if the AGM is postponed for two months

     b. supports the holding of AGMs using appropriate technology

4. ASIC does not have the power to grant extensions of time to hold an AGM on a ‘class basis’, i.e. to all entities. They have therefore provided a ‘no-action’ position on upcoming AGMs that need to be deferred or that are held online.

5. State regulators – positions vary State to State

      a. If postponing, apply for an extension or rely on blanket extension – depending on the State

      b. If holding virtual AGM –only VIC & ACT allows virtual AGMs regardless of what is in the constitution;
      NSW & QLD allow if in constitution other States/Territories silent so common law applies

6. Charities – obligation is to be accountable to members, not to hold meetings. ACNC guidance at https://www.acnc.gov.au/node/5781959

7. The issue of "no substantial injustice"


Practical Considerations

1. The Board, meeting remotely, should minute a resolution to hold the AGM using Zoom, or whatever technology is considered appropriate, and include the reasoning for the decision in the resolution and the justification for believing it is appropriate

2. NoM needs to specify the technology – check the constitution for location constraints

3. Establishing quorum (depending on the wording in constitution) effectively mark the roll to at least establish quorum if not all

4. If proxies allowed need a way of confirming/ if not allowed need way of affirming only members online

5. Practical constraints on electing a chair if constitution requires that so may need to arrange who beforehand

6. Chair needs to be slow and systematic in working through the agenda and allow time for responses and managing responses so all hear/participate

7. How can members ask questions?

8. If there are resolutions to be voted on or an election for directors to be held, how will the vote be conducted electronically? Simple way is to carry vote ‘on the voices’. What if a poll (secret ballot) is called? Consider allowing pre-voting if constitution allows and subject to the resolution.


Remember...

It is generally up to the Members to take issue so unlikely you will get a challenge in the circumstances if your actions are considered reasonable.


We are here to help.

Please get in touch if you have any questions:

Kathy Nguyen,
Manager - Client Services, Associations Forum

kathy@associations.net.au




Disclaimer:

This is practical advice based on our work with associations and charities. The contents of this presentation do not constitute legal advice, are not intended to be a substitute for legal advice and should not be relied upon as such. You should seek specialist advice in relation to any particular matters you or your organisation may have. This presentation is the intellectual property of Associations Forum and may not be re-presented without our permission.


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