Commentary: Why companies should make virtual, hybrid AGMs a reality — it’s in line with Singapore’s inclusivity push

Amendments to Singapore’s laws to permanently allow companies the option to organise fully virtual or hybrid annual general meetings (AGMs) were deliberated and passed by lawmakers in Parliament on May 9.

The legislative amendments, developed by the Accounting and Corporate Regulatory Authority, the Ministry of Finance and the Monetary Authority of Singapore after a public consultation in February, are a step in the right direction.

Much like the shift towards flexible work in recent years, hybrid AGMs confer several benefits.

They promote inclusivity and widen access to conversations and information that was previously only made available to shareholders who could attend in person.

Various groups which may not otherwise find it convenient to attend a physical AGM, including caregivers, the disabled, seniors with mobility issues, and overseas shareholders, will benefit from getting a seat at the virtual table.

In fact, having such meetings conducted virtually is now part of expectations in today’s hybrid world, along with flexible ways of living, playing and working.

In particular, young people in Singapore are learning about AGMs for the first time as they start taking charge of their finances. Many are digital natives and are already very comfortable with receiving financial advice digitally through robo-advisers, as well as making investments using online trading platforms.

The option to attend virtual AGMs syncs with this generation’s digital-first approach.

The ease of use of online communications platforms, with new features like live transcription and live translation, can break down language barriers and drive more inclusive meetings. This makes financial literacy and knowledge more accessible to Singaporeans of all ages and languages.

Besides driving investment interest amongst younger generations, elderly investors looking to prepare for retirement adequacy could also better understand the health of their investments — improving overall stakeholder engagement.

Ensuring inclusivity is especially pertinent in the midst of the current public discussion on renewing Singapore’s social compact and the commitment of the present and incoming political leadership to ensure no one is left behind amid the country’s economic progress.

Second, providing a digital option for AGMs is in line with the Singapore Exchange and listed companies’ increasing focus on sustainability, evidenced by the proliferation of chief sustainability officers and the shift towards digital-only annual reports in recent years.

Fewer shareholders will need to travel to the physical AGM, and fewer companies will need to provide catering, minimising food waste.

This could reduce carbon footprint and give companies another avenue to accelerate their sustainability efforts, contributing to wider societal benefits to hybrid or electronic AGMs.

Most virtual meeting platforms already have features that help replicate a physical AGM set-up — including electronic voting (either by a virtual raising of hands or polling), and real-time question and answer.

GOVERNMENT AND COMPANIES CAN DO MORE

But even as the legislative amendments to the Companies, Business Trusts and Other Bodies (Miscellaneous Amendments) Bill permanently entrench what was a temporary option, more can be done moving forward, both by the authorities and listed companies.

The amendments also empower the authorities to introduce safeguards that restrict or mandate the types of meeting technology that may be used, and impose identity verification or authentication requirements for attendees.

It is crucial that these safeguards are introduced and made public soon, especially since these were also some of the concerns brought up by lawmakers during the Bill’s reading in Parliament.

These are important protections that should be introduced in the near future. 

Specifying minimum security standards or features that such virtual meeting software should include will ensure that these events flow smoothly and are not disrupted by uninvited participants, or participants who are not authorised to take certain actions, and maintain the events' integrity.

Many of these features, commonplace in enterprise-level virtual meeting software, replicate how we ensure security at a physical meeting.

They range from a “waiting room” to screen attendees before allowing them to join the actual meeting, the ability to “lock” a meeting room after the meeting starts, the ability for only the host to mute and unmute participants, as well as managing and controlling access to screen sharing.

Companies should be required to use these settings by default. Some of these settings were also listed in a guidance document issued by the Ministry of Home Affairs in 2021, for registered societies which it oversees under the Societies Act.

Further, regulators could consider requiring the software to offer other features such as audio signatures and watermark screenshots, so that if certain meeting contents are shared outside of or after the event without permission — or even doctored and then shared online — companies can track down the perpetrator and take action if necessary.

Meanwhile, it seems many companies have switched to physical-only events, during the recent AGM season.

A recent Business Times report found that out of 21 Straits Times Index companies whose financial year ends this December, 18 had announced the format of their AGMs in April and May.

Of these, 14 said they would hold physical meetings. The remaining four were split evenly between hybrid and virtual-only meetings.

As a shareholder in several companies, I received starkly different invitations recently as well. Three were from blue-chip, Straits Times Index household names, and for physical-only events.

A fourth, from a small marine company outside the Straits Times Index, was for an online-only meeting.

Both formats are less than ideal.

An online-only meeting may limit shareholder interaction with the company’s leadership and board, especially if there are important issues to be discussed. A physical-only meeting may be an obstacle for shareholders restricted by time, cost or ability.

In this new flexible environment where having a choice is highly valued by shareholders, companies should move towards a permanent hybrid option for their AGMs — just like many are adopting for their employees when it comes to work schedules.

It would be a shame if institutions in a world-class financial and technological hub like Singapore return to pre-Covid-19 practices, when the advances of technology offer ways to promote inclusivity and sustainability and have been proven to work during the pandemic.

Meanwhile, the onus will be on companies to ensure they select a reliable meeting platform when hosting AGMs in a virtual or hybrid fashion for its advantages to be fully realised.

The Government has already indicated the way forward by passing the amendments; companies should follow suit to make regular virtual or hybrid AGMs a reality.

ABOUT THE AUTHOR:

Leonard Lim is Head of Public Policy and Government Relations for Asia-Pacific at Zoom.