Changes in listed company rules to allow virtual AGMs

Listed firms are now changing their regulations to allow for virtual annual general meetings (AGMs) to accommodate realities such as Covid-19 that have made large physical gatherings impossible.

State ban on physical gatherings had stalled holding of AGMs, which are usually crucial for endorsing dividend payments and voting new leaders.

This was, however, unlocked by the High Court order in April that granted special window for Nairobi Securities Exchange (NSE) firms to hold virtual meetings with clearance from Capital Markets Authority.

Many firms current Articles of Association (AoA) were drafted at a time when a situation such as the Covid-19 pandemic and its impact was not envisaged.

Listed firms such as BAT Kenya #ticker:BAT, Absa #ticker:ABSA, Stanbic Bank #ticker:CFC and KCB Group #ticker:KCB are now changing their articles to allow for future digital meetings without requiring special approval.

The move will save companies millions of shillings that they have been spending on hotel bookings, travel, lunch, printing voluminous copies of annual reports and buying goodies such as branded umbrellas to gift shareholders.

BAT Kenya has informed shareholders that it wants to delete the existing AoA and replace with a new one that allows virtual meetings upon approval by shareholders.

“The directors view this as an opportune time to modernise the company’s Articles of Association and have proposed a new set of Articles of Association,” says the firm.

An AoA is a document that defines the purpose of a company, regulations and outlines how tasks should be accomplished.

Absa Kenya, which rebranded from Barclays Bank of Kenya, says it is going to modernise the articles of association in line with the best practices.

Stanbic Bank has also informed its members of the intention to make changes to the AoA during the AGM.

Members are expected to endorse changes allowing the board to make it possible for both physical and electronic attendance of AGMs going forward.

“The board may make arrangements for simultaneous attendance and participation by electronic means allowing persons not present together at the same place to attend, participate and vote at the meeting,” reads AGM agenda.

Other firms such as Total Kenya have, however, left their AoA intact and are going to ride on the High Court order to hold AGMs while several companies such as Limuru Tea and Eveready suspended their annual meetings and are yet to give a new date.