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Holding meetings without breaking social distancing measures

28 April 2020: ICAEW’s Business Law team outline some of the key factors smaller entities need to take into account when considering meetings in the age of coronavirus measures.

COVID-19 social distancing measures require people to stay at home and prevent gatherings of more than two people in public unless essential for work (or gatherings of people who live together).

This poses challenges for organisations that normally hold physical meetings. Much of the guidance around this issue has focussed on large companies, but many small organisations face similar problems. Here, ICAEW’s Business Law team considers some of the key considerations for such entities.

This article should not be relied upon for formal purposes and readers should seek advice as appropriate to their individual circumstances.

Know your constitution

The starting point for any organisation is to know what legal form it has adopted and what rules govern its operation – in short, its constitution. 

The organisation’s constitution may take various forms, for instance, articles of association (for companies) trust deeds (for trusts) or rules (for unincorporated associations like sports or social clubs). These will typically outline when meetings are required, how they may be conducted and what powers of delegation are available.

Organisations should also consider relevant legal and regulatory provisions, for instance, the Companies Act 2006 (for companies) and charity law and regulation (for charities, whether or not they are companies).

Is a meeting needed?

Much of the day-to-day work of organisations can be done via email, telephone or video conference rather than meetings, and organisations can (and are) already adapting to this way of working.

However, some activities such as voting or taking collective decisions may best be done in a meeting. Meetings may also be required in the organisation’s constitution: for instance, many organisations are required to hold annual general meetings (AGMs) of members. In some cases, roles such as director or treasurer are subject to a maximum tenure, and a meeting may be required to replace or renew appointments (typically at an AGM).

If they have not already done so, small organisations should urgently check timeframes for required meetings so they can plan appropriately. For instance, notice is likely to be required of an AGM and papers (including accounts) will typically need to be circulated in advance.

It may be possible to delay meetings in the hope that social distancing measures will be relaxed if the constitution allows. Where meetings relate to external deadlines such as the filing of accounts at Companies House or the Charity Commission, organisations should check whether those deadlines have been relaxed in light of the COVID crisis. Further information on such deadlines is available from sources at the end of the article.

Physical or virtual meetings?

The circumstances when physical meetings are permitted under the social distancing rules are extremely limited in this context. 

Guidance provided to companies by ICSA concludes that shareholders’ attendance at a general meeting is not “essential work” unless attendance is necessary to form a quorum, and recommends the use of proxy voting. Similar principles may apply to other types of membership organisations, particularly those (for instance some charities) with a large number of members who have rights to participate.

Organisations should, therefore, consider using alternatives such as written resolutions or electronic meetings, if this is permitted by their constitution. 

If the constitution requires meetings to be held in person or the position is unclear, organisations might consider changing the constitution, but all formalities required for this (including obtaining any regulatory consent required) would need to be followed. If a meeting is required to do so, the same considerations regarding social distancing would apply. 

If the position is unclear or the organisation is faced with the unpalatable choice of breaching its constitution or breaching the social distancing measures, it should consider taking legal advice.

In the few cases where physical meetings can be held, those involved should be mindful of the health and safety implications of such meetings and stick to the relevant government guidelines

Holding virtual meetings

Most of us are familiar with virtual meetings in our personal lives or through work. But establishing virtual meeting facilities for organisations to use and the mechanics of running virtual meetings need careful consideration.

For instance, organisations should consider:

  • Which technology is most suitable
  • How to maintain security
  • Confidentiality and data protection implications 
  • How to extend access to all those entitled to participate
  • Matters such as how to call for and count votes, enable questions and maintain a quorum (where relevant).

Extensive information is available to organisations on these issues, including from sources noted below.

 

Further information

  • ICSA guidance for companies holding AGMs (from this link)
  • ICSA guidance on good practice for virtual board and committee meetings (20 pages) (from this link)
  • ICAEW video conferencing and remote collaboration tools - insights and externally produced resources on the apps and software available and tips for best practice, including those noted below (from this link)
  • ICAEW guide on tech issues when working from home. This includes tips on checking networks and security that may be relevant to small organisations (from this link)
  • ICAEW guide on cybersecurity during the COVID crisis including protecting sensitive information (from this link)
  • ICAEW information on governance, including information on boards and being an effective director during COVID (from this link)
  • ICAEW’s Coronavirus hub contains a range of information on COVID-19 (from this link)
  • Charity Commission guidance for the charity sector on COVID-19 (from this link)
  • Government announcement on legislation to enable companies required by law to hold AGMs to do so (from this link) and Q&A’s on AGMs from Department for Business, Energy & Industrial Strategy (from this link).