On 18 April 2020, the Securities Commission of Malaysia (‘SC’) issued a Guidance Note and FAQs on Conduct of General Meetings by Listed Issuers (‘Guidance Note’).
 
Part I of the Guidance Note sets out the introductory matters while Part II contains a series of Frequently Asked Questions (‘FAQ’) to clarify issues under specific topics.
 
Overview
 
Purpose and duration
 
The purpose of the Guidance Note is to guide all companies listed on Bursa Malaysia Securities (‘Bursa Malaysia’) on the conduct of general meetings, including Annual General Meetings and Extraordinary General Meetings during a period when the Movement Control Order (‘MCO’) is in place or after the MCO is uplifted but where safe distancing requirements remain (e.g. restriction on mass gatherings) (paragraph 1.2 of Guidance Note).
 
Types of online meetings
 
The Guidance Note identifies two types of online meetings, namely  fully virtual general meetings and hybrid general meetings (paragraph 1.2 of Guidance Note).
 
Fully virtual general meeting
 
A fully virtual general meeting is conducted online, without a physical meeting venue for board members, senior management, shareholders and others involved in a general meeting to gather. The only venue involved in the conduct of a fully virtual general meeting is the broadcast venue where only the essential individuals are physically present to organise the fully virtual general meeting. Shareholders in a fully virtual general meeting will participate by audio or/and video capabilities (paragraph 1.3 of Guidance Note).
 
The broadcast venue is a physical venue in Malaysia where the Chairperson of the general meeting is physically present. The essential individuals may also be present at the broadcast venue to facilitate the conduct of a fully virtual general meeting (footnote to paragraph 1.3 of Guidance Note).
 
Essential individuals, who are limited to not more than eight in number, include the Chairperson of the general meeting, the Chief Executive Officer, the Chief Financial Officer, the company secretary, the auditor, the scrutineer and those providing audio and visual support for the fully virtual general meeting (paragraph 1.4 of Guidance Note). 
 
During the MCO, the SC will only consider and facilitate time-limited travel exemptions for essential individuals to conduct a fully virtual general meeting. The application is to be submitted to the SC at AGM@seccom.com.my in the form set out in Appendix 1 of the Guidance Note no later than five working days prior to the date of the general meeting (paragraph 1.6 of Guidance Note).
 
Hybrid general meeting
 
A hybrid general meeting is conducted at a physical meeting venue with shareholders physically present. The same meeting is broadcasted online, and shareholders are also provided the option of participating in the meeting via audio or/and video capabilities (paragraph 1.5 of Guidance Note).
 
A listed issuer is not allowed to conduct a hybrid general meeting during the MCO as it involves a gathering of individuals at one or more physical meeting venues (paragraph 1.6 of Guidance Note).
 
Frequently Asked Questions
 
Notice of general meeting
 
A listed issuer may issue a notice of meeting electronically to its shareholders provided that it is permitted to do so under its constitution, and it complies with any applicable requirements under the Companies Act 2016 (‘CA 2016’) and the applicable Listing Requirements (‘Listing Requirements’). The listed issuer must issue the notice of the meeting in accordance with the manner as set out in its constitution (FAQ 2.4).
 
In addition, the listed issuer must comply with the stipulated notice period under section 316(2) of CA 2016 and its constitution (FAQ 2.5).
 
Conduct of meeting
 
Section 327(1) of CA 2016 allows the use of technology for the conduct of general meetings unless the listed issuer’s constitution requires the general meeting to be held at a physical venue. The listed issuer should ensure that (a) the technology used enables members to exercise their rights to speak and vote at the meeting; (b) the main venue of the meeting is in Malaysia; and (c) the Chairperson of the meeting is present at the main venue (FAQ 2.6).
 
According to the SC, a listed issuer may leverage on technology to conduct its general meeting provided its constitution does not prohibit it from doing so. If a listed issuer’s constitution is silent on the manner a general meeting is to be conducted, the listed issuer is permitted to leverage technology to conduct its general meeting (FAQ 2.7).
 
If a listed issuer’s constitution expressly prescribes the requirement for a physical meeting venue to conduct its general meeting, such listed issuer is advised by the SC to defer the conduct of its general meeting until circumstances permit the use of a physical venue (FAQ 2.7).
 
Listed issuers are further advised by the SC to review and update their constitutions to enable the use of technology to conduct general meetings and facilitate communication and engagements with shareholders electronically (FAQ 2.7).
 
According to the SC, the ‘venue of the meeting’ envisaged under section 327 of CA 2016 is a physical venue. Technology, such as online platforms, can be used to facilitate the conduct of general meetings, but listed issuers must be able to demonstrate that the main venue of the meeting is in Malaysia where the Chairperson is physically present. The SC added that the ‘broadcast venue’ as described in paragraph 1.3 of the Guidance Note satisfies the requirements under section 327(2) of CA 2016 that the main venue of the meeting is in Malaysia (FAQ 2.8).
 
Shareholders of a listed issuer are allowed to submit their questions prior to the general meeting within the stipulated time and through such manner (e.g. electronic means or by post) as determined by the listed issuer (FAQ 2.8).
 
The right of a shareholder to speak at a fully virtual general meeting or a hybrid general meeting is not limited to verbal communication but includes other modes of expression, e.g. real-time submission of typed texts. However, all modes of communication must be expressly stated as acceptable by the listed issuer in the notice of the meeting. This is to ensure that in the event of any technical glitch in the primary mode of communication, it can be supplemented by a secondary backup communication channel (FAQ 2.20).
 
Fully virtual general meeting
 
In addition to the requirements under section 327 of CA 2016, a listed issuer should comply with the following requirements in relation to a fully virtual general meeting -
 

Listed issuers are advised by the SC to provide their shareholders with a dedicated contact number and/ or email to submit queries or request for technical assistance to participate in the fully virtual general meeting (FAQ 2.12).
 
For the purposes of section 317(1)(a) of CA 2016, the notice of meeting for a fully virtual general meeting must –
 

As required under section 327(2) of CA 2016, the Chairperson must be physically present at the broadcast venue (FAQ 2.14). Subject to the listed issuer’s constitution, if the Chairperson of the meeting is not in Malaysia, the meeting shall not proceed unless members or directors, whichever is specified in the constitution, elect one of their members who is in Malaysia to be the Chairperson of the meeting (FAQ 2.15). It is to be noted that the person who is so appointed as the Chairperson must be physically present at the broadcast venue.
 
Directors of a listed issuer who are not part of the eight essential individuals allowed at the broadcast venue can participate in the meeting online (FAQ 2.16).
 
Hybrid general meeting
 
In addition to the requirements under section 327 of CA 2016, a listed issuer is required to comply with the following requirements for conducting a hybrid general meeting -
 

Tabling of resolutions
 
For both a fully virtual general meeting and a hybrid general meeting, a listed issuer must table all the resolutions required under the law, the Listing Requirements and the listed issuer’s constitution (FAQ 2.21).
 
Record of proceedings and announcement
 
Listed issuers are required to ensure the meeting proceedings and resolutions passed at the meeting are properly recorded and maintained as required under section 341 of CA 2016 and if possible, record (video and audio recording) the proceedings of the meeting (FAQ 2.21).
 
Additionally, listed issuers must publish a summary of the key matters discussed at the annual general meeting, as soon as practicable after the conclusion of the annual general meeting, on their website, in accordance with paragraph/ Rule 9.21(2)(b) of the Listing Requirements (FAQ 2.21).
 
Quorum
 
Subject to a listed issuer’s constitution, the quorum shall be at least two members, personally participating in the meeting or by proxy, pursuant to section 328(2) of CA 2016. Participation of members is not restricted to physical presence but also includes members’ online participation at the meeting (FAQ 2.22).
 
The quorum of a general meeting can be determined as follows –
 

A listed issuer must also ensure that there is proper mechanism to ensure members or proxies can fully participate in the meeting. There must also be a proper audit trail to record the attendance of individual members at a meeting (FAQ 2.23).
 
Voting
 
The online voting process must enable shareholders to cast their votes in time (i.e. the ability for shareholders to cast their votes remotely and contemporaneously (live) during the proceeding of the general meeting) (FAQ 2.24).
 
Members may also cast a vote via proxy forms appointing the Chairperson of the meeting to vote on the members’ behalf. The proxy forms should be submitted within the stipulated time and through such manner (e.g. by electronic means or post) as determined by the listed issuer (FAQ 2.25).
 
The requirement under paragraph 8.29A(2)/ Rule 8.31A(2) of the Listing Requirements to appoint a scrutineer remains applicable to a fully virtual general meeting and a hybrid general meeting. Accordingly, a listed issuer must appoint at least one scrutineer to validate the votes cast on-site or remotely at the general meeting (FAQ 2.26).
 
As in the case of a physical general meeting, the scrutineer must ensure that the votes cast by an online voting process are validated (FAQ 2.27).
 
Continuance of Guidance Note post-MCO
 
The Guidance Note will still be applicable to guide listed issuers on the conduct of fully virtual general meetings and hybrid general meetings after the MCO. When appropriate, the MCO and Covid-19 related guidance would be removed, e.g. the limitation on the number of individuals permitted to be physically present at a broadcast venue of a fully virtual general meeting (FAQ 2.29).
 
Comments
 
The Guidance Note is welcomed as it provides helpful guidance to listed issuers in conducting fully virtual general meetings and hybrid general meetings both during and after the MCO. This accords with the increasing emphasis given by the SC and Bursa Malaysia for listed companies to leverage on technology in their business and affairs.
 
A cautionary note for listed issuers is that the selected platform which enables members to participate at a general meeting online must have sufficient security features to ensure that only members and their proxies are permitted to participate in the proceedings, and more importantly, to vote on the resolutions tabled for adoption by the members.
 
Alert prepared by Phua Pao Yii (Partner) and Ebbie Amana Wong (Associate) of Skrine.