From videoconferencing to virtual AGMs, the COVID-19 lockdown has changed how board meetings work.
Hands up those directors loving the move to virtual board meetings? During the past two months, boards have shifted rapidly to videoconferencing, virtual communications and electronic approvals. Discussions with directors on the experience reveal that while it has presented logistical challenges, there have been huge benefits. There has been widespread discussion on the merits of virtual platforms such as Webex, Zoom, BlueJeans, Microsoft Teams or Loop. Tom Ford’s New York Times tips on how to look good on video calls have also been widely shared.
The benefits range from substantial time and cost savings in travel, transfers and accommodation to the benefits of shorter and more frequent board meetings on key issues — less process, more action and clarity of focus. Some say it has also forced many directors to improve their listening skills. However, directors have also pointed to decision-making disadvantages. While effective for more operational matters, when it comes to strategy and fine judgements, there can be a tendency to groupthink if meetings are not carefully managed so all can be heard.
Trent Bartlett FAICD, a director on several boards, says while it has been “surreal” to be in virtual meetings and workshops, the success of remote working will bring long-term changes to the way Australians conduct business. “Making such big calls on the organisations and our people has been strange,” says Bartlett. “These sorts of decisions were always done face-to-face, not over the phone. I sense a reflection for boards and executives going forward is whether we should not be too concerned about making a leadership decision virtually when the new CEO may have to increasingly lead the company in a virtual environment.”
While the experience has worked well for some, others say the new regime has become an exhausting round of interactive conference calls, simultaneous chats, texts, emails and check-in calls. Juliet Bourke, human capital partner with Deloitte, says this can be cognitively depleting and impact sound decision-making. “The more cognitively depleted we become, the less we’ll care about being thoughtful, consultative and empathetic” she says.
After the initial leeway granted in March by the Australian Securities and Investments Commission to companies with imminent deadlines as a response to the risks from COVID-19, companies have legal certainty on virtual AGMs and electronic execution.
In May, Treasurer Josh Frydenberg announced changes to the Corporations Act 2001 to allow organisations to convene AGMs and other prescribed meetings entirely online to provide certainty to companies and boards about how they can meet their legal obligations.
He said that under current social distancing measures, it is difficult for shareholders to physically gather the board at AGMs. Company boards will be able to:
- Provide notice of annual general meetings to shareholders using email
- Achieve a quorum with shareholders attending online
- Hold annual general meetings online.
Meetings must continue to provide shareholders with a reasonable opportunity to participate. As a result, shareholders will be able to put questions to board members and vote online. Further changes will allow company officers to sign a document electronically, ensuring documents are properly executed at a time when many ordinary business operations have been disrupted. The changes will be in force until 6 November.
CEO of the Australian Shareholders Association John Cowling FAICD says the organisation has always been an advocate of hybrid AGMs, but that face-to-face still has its place. “It’s important shareholders have a voice and that they can ask questions and see how directors and people respond on issues.”
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