Virtual general meetings
What is the status in 2023?
With the expiry of the special regulations for general meetings under the COVID Measures Act on 31 August 2022, the legislator has now enshrined a permanent legal basis for virtual general meetings in the Stock Corporation Act. The latest development occurred in March 2023, when the Federal Ministry of Justice announced that shareholders may now participate in general meetings of public limited companies without being physically present at the place of the meeting. A new paragraph was added to the Stock Corporation Act for this purpose. With virtual general meetings, an important step towards the further digitalisation of company law has been achieved.
In order to hold a virtual general meeting, it is necessary to create a corresponding basis in the articles of association. This basis can either be established directly in the articles of association or the board of directors can be given the authorisation to do so. In this way, shareholders can decide whether the meeting should be held virtually. However, it is important that this provision in the articles of association or authorisation is time-limited and valid for a period of up to five years. In this context, the format of the virtual general meeting is flexible, as there are no restrictions on the content covered.
A transitional provision allows general meetings convened up to and including 31 August 2023 to be held as virtual meetings even without a corresponding provision in the articles of association. However, this requires the decision of the executive board and the consent of the supervisory board.
Structure of shareholder rights
By law, shareholders' rights are fully protected. Some important aspects are:
Right of rescission
In order to reduce the likelihood of actions for rescission due to technical malfunctions, the provisions of the Companies Act, which limit the possibilities for rescission in such cases, will be extended to the virtual general meeting. This is intended to minimise the risks for the companies.
Evaluation of the AGM season 2023
In the current AGM season 2023, public limited companies were therefore faced with the decision of whether to hold a virtual AGM without physical presence of shareholders according to the new Stock Corporation Act or whether to choose the old familiar format of a presence AGM after three years of virtual COVID AGMs.
After all invitations for the AGMs of all DAX companies had been available since mid-May, a first empirical study was conducted to find out how 38 of the DAX 40 listed companies, which have their registered office in Germany and are subject to German stock corporation law, made their decision (Airbus SE and Qiagen N.V., whose registered office is in the Netherlands, were not considered).
Majority pro virtual meeting
Especially in view of the critical discussion - particularly in the media - it was eagerly awaited which AGM format was preferred by the companies and how many of them would return to the face-to-face AGM in 2023.
The result of the survey shows that a majority of around three quarters of the companies, i.e. 28 out of 38 companies, opted for the virtual meeting. In contrast, ten of the DAX companies chose the traditional face-to-face format.
In detail, the distribution is as follows:
The evaluation shows that the vast majority of companies consider the new regulations regarding virtual general meetings to be practically implementable. Although there was public scepticism at the beginning, they still adhere to the virtual AGM format even after years of the "COVID annual general meetings".
In order to optimally organise virtual events, 3Q provides a variety of solutions for event management, technical implementation and guest management in cooperation with partners.