Four in ten Irish companies held closed AGMs last year

Four in ten Irish companies held closed AGMs last year

Anne Harkin

Nearly four in ten Irish-listed companies held closed AGMs in 2020 as a result of the Covid-19 pandemic, according to a report from business law firm Mason Hayes & Curran LLP.

The firm’s AGM Season Report 2020 reviews the types of AGMs that took place during the pandemic and the implications of these new formats for shareholders.

It also examines board diversity, noting some progress being made among the 25 main-market listed companies included in the analysis.

Senior associate Anne Harkin said: “The 2020 AGM season has been unique. The impact of Covid-19 caused many AGMs to be postponed, live voting rights to be restricted, and changes to dividend and remuneration proposals.

“Companies also had to grapple with the logistics of their AGMs, taking into account public health concerns, while at the same time complying with the legislative and regulatory requirements that safeguard shareholder voting rights.”

According to the report, the global impact of Covid-19 began to be felt at the beginning of the traditional AGM season. Some companies proceeded with their AGMs under alternative arrangements with a restricted attendance, with other companies deferring AGMs until later in the year.

More than half (56 per cent) of companies covered by the report strongly encouraged their shareholders not to attend the AGM, while nearly four in ten (36 per cent) held a closed AGM. Eight per cent held their AGM before the Covid restrictions were in place.

Partner Justin McKenna said: “The Covid Act, which commenced on 21 August 2020, made temporary amendments to the Companies Act 2014. Prior to this Act, virtual meetings were not permissible under Irish law and companies had no intrinsic power to ensure that shareholders did not attend the physical AGM. This did cause some issues, as seen with the High Court refusal to grant an order restraining the holding of a closed AGM by Grafton Group on the foot of an injunction brought by the company’s largest shareholder.

“Once introduced, the Act allowed an Irish company to hold a true virtual general meeting with no physical venue for the first time, and has now been extended to 9 June 2021 following government approval on 17 December 2020.”

In terms of diversity, nearly a third (29 per cent) of board seats on Irish-listed PLCs are held by female directors, up from 25 per cent in 2019 and 19 per cent in 2018. AIB has made the most progress in this area and now has a board comprising of a majority of female members.

Ms Harkin said: “The recent report from Balance for Better Business acknowledged some progress in this area, albeit slow progress. Amongst the 25 companies in this report, the increase from 19 per cent in 2018 to 25 per cent in 2020 is good news, but there is still work to be done to change the nature of board culture. The example of AIB with a majority female board is one to be applauded.”

The report also shows that only 36 per cent of companies declared a dividend last year, compared to 54 per cent in 2019, with three companies withdrawing a proposed dividend resolution in light of Covid-19.

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