We were asked about the legalities of electronic AGMs by an SCVO member recently, so I asked MacRoberts, one of our Pro Bono Service legal partners, to take a look at what organisations should consider.
Both unincorporated and incorporated charities are able to conduct meetings electronically (preferably with visual access) unless their constitution prohibits it. So the first step is to check what your governing document says about the procedures to be followed at your AGM.
For charitable companies, as long as the articles of association don’t prohibit it or require attendance in person, then a valid general meeting under company law simply requires that people are able to both see and hear each other. So those attending the meeting don’t have to be in the same place as each other, as long as they can exercise their right to speak and vote.
Holding an electronic general meeting offers a number of advantages:
- In emergency situations, where decisions need to be made quickly
- Where charity trustees live long distances from a central meeting point, or even overseas
- In providing wider communication and stronger participation in the meeting, enabling those with a disability to participate. Though take care not to exclude visually or hearing impaired members from full participation
- In saving money on travel costs
But do bear in mind that when holding a meeting electronically, there can be a loss of communication and there is a potential for lack of focus.
As well as difficulties with technology, consider there may be problems regarding identifying those who want to speak, and in making sure points are understood.
For these reasons, holding an AGM electronically may be more successful with smaller groups, and you should ensure all involved are happy with this method of communication.
So do consider the use of video conference or Skype. Unfortunately, telephone conferencing (in the absence of video) only allows those present to hear each other, so would risk falling short of legal requirements as established by case law. Though such a means of participating in an AGM appears to comply with the requirements of the Companies Act 2006.
For charities that aren’t companies, there is a lack of legislative or case law backing for holding meetings via electronic means.
We can look to guidance from the Charity Commission that has a useful section on charities and meetings. This guidance indicates that charities that are not companies can hold a valid members’ meeting by video conference, teleconference or Skype if there is a provision in the charity’s governing document that allows it. If your constitution doesn’t contain such a power, it can be amended to include one.
Again, bear in mind that these methods have a potential for miscommunication, and might be difficult to manage with a large group of people, but it’s certainly something you can consider.
It’s good practice to have at least one physical meeting of the charity trustees once a year, but new technology offers many advantages.
If you’d like more information or advice on the legal issues surrounding AGMs, give our Information Service a call on 0800 169 0022.