Passage of Bill to resolve ‘Catch-22’ situation on AGMs welcomed by Institute of Directors in Ireland
The Institute of Directors (IoD) in Ireland has today welcomed the passage of the Companies (Miscellaneous Provisions) (Covid-19) Bill 2020 addressing the many issues facing companies trying to comply with, in particular, the Company Law requirement to hold AGMs during the current crisis, as detailed in Section 6 of the Bill.
The Bill will now go to the President to be signed into law.
The Government’s announcement today on the matter follows the IoD’s letters to the former Minister for Business, Enterprise, and Innovation, Heather Humphreys TD, and the Office of the Director of Corporate Enforcement (ODCE), plus relevant spokespersons of the then-Opposition, on 29th April 2020 calling for action on these issues. The IoD also recommended that any new legislative initiative on the issue should be applicable for what it termed, “the current period of uncertainty during the COVID-19 crisis”.
In a further statement on 11th June, IoD Ireland again conveyed the sense of urgency needed to deal the matter of AGMs while health and safety restrictions are in place during the COVID-19 pandemic.
That IoD call came after the representative body had published the results of a snap poll of its 3,000 members, comprising CEOs and company directors, which found that 90% of business leaders said Company Law should be amended temporarily during the COVID-19 crisis to allow virtual AGMs to be held without the need for a company to amend its Constitution.
Maura Quinn, Chief Executive of the Institute of Directors in Ireland, said:
“The passage of the Bill is to be welcomed and is a recognition that the views of business leaders have been taken on board. Physical AGMs have proven very difficult during this period, so it is appropriate to make virtual AGMs acceptable across the board and their decisions and motions legally binding and effective, where applicable. It is vital, too, to ensure interactive shareholder involvement in these meetings. Many companies could not change their Constitutions to provide for virtual AGMs without holding an AGM or EGM in the first instance. That Catch-22 situation is, thankfully, being resolved and it removes - at least until the end of this year - one of the many headaches facing business leaders in the current crisis.”
Maura Quinn also welcomed the extension until the end of this calendar year of the timeframe by which AGMs must be held (where otherwise they should have been convened earlier). This is in line with a European Commission proposal.
Link to Companies (Miscellaneous Provisions) (Covid-19) Bill 2020
- Full bill, see section 6 in reference to the AGM aspect: https://data.oireachtas.ie/ie/oireachtas/bill/2020/15/eng/initiated/b1520s.pdf.
Previous IoD Ireland press releases on the AGMs’ issue:
- 11th June 2020: IoD urges Government to move quickly to resolve AGMs dilemma in current crisis: https://www.iodireland.ie/news-events/news/iod-urges-government-move-quickly-resolve-agms-dilemma-current-crisis.
- 29th April 2020: 90% of business leaders want law amended to allow virtual AGMs during crisis (the following link also includes the key findings of the IoD AGM Snap Poll conducted by IoD Ireland in April 2020): https://www.iodireland.ie/news-events/news/90-business-leaders-want-law-amended-allow-virtual-agms-during-crisis.