How organisations can prepare for online AGMs and EGMs and remote voting 

 

Background 

Organisations that undertake AGMs and/or EGMs are obligated to allow members, shareholders, or employees (where appropriate) to be involved in decisions and therefore provide them with their democratic right to vote on motions and resolutions.

Each organisation has its own articles, rules or constitution, which will specify details of the general meeting including notice, timescales, processes, format, roles and responsibilities.  If organisations review these periodically it is most likely there will be provisions for internet voting in relation to remote meeting attendance and remote voting.  However, organisations that have articles, rules or constitutions that were written way before the advent of popular internet meeting processes may be wondering what their options are in light of COVID-19.

Whilst it is appreciated that voting is only one aspect of the overall meeting process, this article explains some of the considerations related to AGM and EGM remote voting processes.

 

Proxy Voting

Proxy voting is the process of allowing those who cannot attend a meeting the ability to nominate and give their voting rights to another, who will attend on their behalf. This means that those who are eligible to vote are informed of the proxy voting process way before the meeting date so that they can submit their instructions regarding their proxy and their voting decisions. This process may typically open three weeks before and mainly closes two days before the scheduled meeting date.

No votes given by a proxy should be included into the final count unless the nominated proxy attends the meeting, in person or remotely. It is therefore common for many eligible voters to nominate the Chair (for the meeting to be formally undertaken the Chair must be in attendance). By nominating the Chair as a proxy, the votes are guaranteed to be included in the final count.

The eligible voter may also decide to mandate the votes to be cast by their proxy. This means the eligible voter provides the proxy with clear instructions on how each vote should be cast for each resolution/motion.  Alternatively, the eligible voter can allow their proxy discretionary votes, which gives the proxy the ability to vote how they choose at the meeting. Finally, eligible voters may also choose a combination of the above i.e. they do not need all of them to be either mandated or discretionary. An example would be: –

Resolution 1: For (mandated vote)
Resolution 2: At the proxies’ discretion (discretionary vote)
Resolution 3: Against (mandated vote)

In the above example, the attendance of the proxy at the AGM/EGM would mean that the mandated votes are included in the count process and unless the proxy makes a vote for resolution two on behalf of the eligible voter, then the vote for resolution two is not included in the count.

Therefore, when collecting proxy instructions, it is vital to collect the proxy’s details and the eligible voters voting intent for each resolution/motion. The details entered by the eligible voter regarding their proxy must allow for the organisation to identify them in some way and to communicate with them.

In a scenario where the process only allows for fellow members of the organisation to be a proxy of another, then a name and a membership ID number should be sufficient. However, some organisations allow anyone to be a proxy and therefore the submission of the name and a valid email address for the proxy is crucial, for them to be communicated with at the appropriate times.

 

Remote voting at the (virtual) meeting

All eligible voters for the AGM or EGM will need to be provided with the following details if attending a meeting remotely:

  1. access credentials of the meeting (be it via Zoom, Microsoft Teams, Google meet etc)
  2. instructions for voting

If proxy voting processes are used, then the communication of these credentials cannot happen until the proxy voting process closes, which is typically two days before the meeting. All proxy voting instructions need to be collated and then subsequently used to distribute meeting and voting credentials (usually by email).

Consideration may need to be given to a pre-registration process for the meeting so that the organisations can send the virtual meeting credentials to those eligible to attend. This may also help with the selected video streaming service and any required associated licensing.

An eligible voter may be voting on behalf of another member (proxy) at the meeting, who, in turn, may also have voting rights themselves. Therefore, it is possible for a proxy to have multiple voting rights. In the case of the Chair, this will most likely be the case.

Where an eligible voter has multiple voting rights, online systems should allow for either each voting right to be cast individually or for the votes of that member to be weighted. This means that when they vote, all of the voting rights given are cast for the option they select for each resolution/motion.

Before the meeting is arranged and communicated, the organisation will need to decide how the voting process will work and where it is scripted into the meeting agenda. Options may include leaving all voting until the end of the meeting, or voting on each resolution/motion in turn, getting the results for each resolution before moving on to the next. These decisions will impact how the voting service is set up and ran, including the count processes.

 

Voting security

Any votes cast either by proxy or at the meeting need to be validated and correctly counted, ensuring no duplication is undertaken. Whilst video streaming services provide details of who is in attendance, users may not use their registered name to attend, therefore, may not be easily identifiable. If organisations decide to manage the voting process using a ‘raise hand’ feature of the streaming service or a chat feature, voting security can be compromised. Therefore, the ability to send voting credentials is paramount to ensure security and to establish identification, allowing eligible voters to vote only once, via a secure and dedicated voting platform.

Those organisations undertaking their own voting processes (in house), specifically for an online AGM or EGM may be open to challenge.  Such voting processes can be considered a ‘black box’ and that the organisation has a vested interest in the outcome. UK Engage is an independent company that has no vested interest in the outcome of an AGM / EGM and as such is a leading provider of these processes in the UK, especially as it has the most secure system and experienced staff.

 

Other considerations

There are other complexities when running remote voting for an AGM or EGM, these include: –

  1. primary and secondary proxy nominations
  2. attendance of eligible member after appointing a proxy, thereby superseding any votes their proxy casts
  3. timing allowance for the Chair – who may be allotted many proxy votes and will have to carry out the voting for all
  4. timing of the voting – does the remote voting process need to be dynamically turned on or off at the meeting or opened when the meeting opens

Another key consideration is the length of time needed to create the voting results, especially if there are complex proxy voting processes included.  In this instance, it is important that, within any script or meeting agenda, there is ample time for the count process to be undertaken. This allows the meeting to flow without any long breaks.

Finally, consideration needs to be given to how once counted, the results will be announced. In what format are the results required? Who are the results presented to and how is the transfer undertaken? For example, if the voting is part online and part in person, there should be plans relating to how the results of those voting in the room and those online are consolidated/verified.

 

Summary

The security of AGM and EGM voting processes are key to ensuring fair and accurate results for all resolutions/motions. Each organisation will have undertaken an AGM or EGM and, most likely, for the foreseeable future, this may have to be in a different way to the previous ‘in-person / show of hands’ format. Taking the meeting online is fairly straightforward and so is the voting process if planned in advance to meet the organisation’s articles, rules or constitution, along with good governance practices.

UK Engage is a leading specialist at understanding all aspects of any organisation’s online AGM and EGM needs specifically relating to voting. You can find out about the temporary legislation in relation to AGM/EGM voting on our latest blog.

 

 

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