COVID-19: Virtual AGM and the Need for Business Continuity

Abstract

The Coronavirus Pandemic (COVID-19) made the world stop. People died and businesses suffered. In Nigeria, COVID-19 restrictions had to be enforced to prohibit large social gatherings and travellings. This hampered the conduct of the Annual General Meeting for public companies - since it is regulated by statute and must be held within a specific timeframe. As a solution, this paper suggests the adoption of technology for AGMs - virtual AGMs - through teleconferencing devices like Zoom, Skype, Webex, etc. We first examine the validity of a set of guidelines released by the Corporate Affairs Commission intending to mandate the use of proxies for AGMs. We conclude that CAC's statement is ultra vires in light of relevant provisions of the Companies and Allied Matters Act 1990 (CAMA) and some Supreme Court decisions.The second part of this paper debates the possibility of convening virtual AGMs without violating the provisions of CAMA. We found that CAMA does not prohibit virtual AGMs. In fact, the statutory requirements of a physical AGM can be adapted seamlessly to a virtual AGM - with more benefits in terms of increased shareholder participation and less costs. In conclusion, we encourage directors and members of public companies, and the Minister in charge of trade in Nigeria to take advantage of the opportunity of virtual AGMs to ensure business continuity.