While a number of public companies have decided to hold virtual annual meetings due to the social distancing requirements prompted by the Covid-19 outbreak, the Supreme Court of British Columbia has ruled that firms can have until the end of the year to hold their AGMs.
The court granted orders sought by a pair of TSX-listed firms, Glacier Media Inc. and GVIC Communications Corp., allowing them to hold their 2020 annual meetings by the end of the year. The firms would ordinarily be required to hold their AGMs by the end of June.
The decision noted that while several provinces have provided relief to companies incorporated under provincial law, and the TSX has said that companies can have until the end of 2020 to hold their meetings, federally incorporated companies haven’t been granted relief.
In this case, the court ordered that the companies should have extensions allowing them to hold their AGM by Dec. 31, 2020.
“It is beyond dispute that the Covid-19 pandemic is an extraordinary and unprecedented event in our collective and individual histories,” the court said.
As a result, the court said that it accepted “the companies’ submissions that management is not currently in a position to advise as to how the companies’ operations should be conducted into the future and what proposals should be put to the shareholders in that respect.”
The court acknowledged the practical difficulties with holding an AGM, including public health orders against large gatherings, travel restrictions and the difficulty of social distancing in a closed meeting space.
The court also found that there are inherent limitations with “virtual” meetings.
“Many of these difficulties in convening such an AGM have to real potential to disenfranchise many shareholders from attending the AGM in a meaningful way and participating in the affairs of the companies, including its ongoing governance. Such ability to participate in the affairs of a company is a fundamental right of a shareholder,” the court said.