COVID-19 poses a number of challenges for the organisation of annual general meetings. Because of the mandatory safety measures, it is almost impossible to participate in a general meeting physically. Therefore, a set of crisis measures was established in a Royal Decree under special powers published on 9 April 2020, providing additional flexibility in the organisation of general meetings.
The Code of Companies and Associations already provides for a number of possibilities to allow shareholders or members not to be physically present. For example, it is possible for shareholders to cast their votes prior to the meeting, or to participate in the meeting remotely. However, these special procedures are open only to companies, and only where their articles of association permit them.
The crisis measures included in the Royal Decree under special powers temporarily allow for increased flexibility in the organisation of general meetings and board meetings. The new options are open to any company or association, as well as to legal persons established under specific legislation, even if the options are not included in the articles of association, and even if the articles of association expressly prohibit them.
Option 1 – General meeting behind closed doors
In the first place, the board may prohibit physical participation. In that case, the board must offer a choice between a vote prior to the meeting and participation by proxy.
- Prior votes must be cast either using a voting form or via a website. Besides the agenda of the meeting, the voting form should also contain the proposed resolutions.
- The board may require that the proxy is granted to a person it designates. If so, the proxies must contain specific voting instructions. If a proxy has already been received in which a shareholder or member had appointed a different proxy holder, the votes or abstentions will still be taken into account if the proxy contains specific voting instructions, and without this other proxy holder having to be present at the meeting.
In listed companies, the voting forms and proxies must reach the company no later than the 4th day prior to the meeting; a scan or photo sent by e-mail suffices.
Each company or association may also organise a general meeting via an electronic means of communication.
With regard to the right to ask questions, the board can stipulate that only written questions may be submitted. In listed companies, the questions must reach the company no later than the 4th day prior to the meeting. Questions must be answered in writing and at the latest prior to the vote. The shareholders or members must be informed of the answers in the most efficient way. Listed companies must publish the answers on their website. The questions can also be answered orally during the meeting if the meeting is broadcast live or recorded for later broadcast (e.g. by audio or video conference).
The members of the bureau (if any), the directors, the auditor and the proxy holder are also not required to be physically present. They may participate by telephone or video conference. For resolutions that must be enacted in a notarial deed, it suffices that the unique proxy holder (participation by proxy) and/or one person authorised by the board (voting by letter) is physically present and signs the deed before the notary. Thus, the technique of the "general meeting behind closed doors" can also be used for special and extraordinary general meetings.
Finally, listed companies are generally exempted from the obligation to send convening notices and other documents by regular post and to keep documents available at their registered office. The other companies are also exempted from the obligation to send the documents by regular post; if possible, they are required to send them by e-mail.
Option 2 – Postponement of the general meeting
The board may also postpone the general meeting. This is particularly relevant for the annual general meetings. More specifically, the annual general meeting may be postponed for up to 10 weeks after the statutory deadline. For companies or associations that closed their financial year on 31 December 2019, this means that the annual meeting can be postponed until 8 September 2020. In this case, the approved annual accounts must be filed with the National Bank of Belgium no later than 8 October 2020.
However, no postponement is possible if the general meeting is called in the context of the alarm bell procedure (capital impairment) where the net assets are, or risk becoming, negative, or at the request of a 10%-shareholder. In these cases, the board can fall back on the technique of the meeting behind closed doors (option 1).
Even if the convening notice has already been sent out
Even if the board has already sent out the convening notice, it can still make use of the crisis measures.
If the board wants to organise a general meeting behind closed doors (option 1), it can change the original convening notice without having to send out a new one. In this regard, it is particularly important to communicate with the shareholders or members concerning this change of plan in the most efficient way, e.g. via the website. Listed companies must announce it via a press release and on their website no later than the 6th day prior to the meeting.
The board can also postpone the annual meeting (option 2). Here, too, transparent communication is required. Listed companies must announce the postponement no later than the 4th day prior to the scheduled date. The postponed meeting requires a new convening notice, in relation to which the usual convening formalities apply (unless the crisis measures are still applicable then).
Board meetings by telephone or video conference
The rules for the organisation of board meetings have also been made more flexible. Even in the absence of a clause in the articles of association, meetings can be held by telephone or video conference. Unanimous written decision-making is also possible, even if the articles of association prohibit this.
For resolutions that must be enacted in a notarial deed (e.g. resolutions concerning the use of the authorised capital or the change of the registered office specified in the articles of association), it suffices that one board member or representative is physically present and signs the deed before the notary.
Measures limited in time
The crisis measures apply from 1 March 2020 until 3 May 2020: companies and associations that are or were required to call a meeting during this period can make use of them, it being understood that, for those covered by it, the special regime will continue to apply thereafter. The King may extend this period.
These measures have been extended until 30 June 2020 (more information can be found here).