KUALA LUMPUR: The gradual adoption of hybrid general meetings should be looked upon as a potential replacement for virtual meetings which are not conducive for shareholder activism, says Minority Shareholders Watch Group (MSWG).
Its chief executive officer Devanesan Evanson sees hybrid general meetings -- a combination of both physical and virtual meetings -- as the way forward, with the receding threat from the COVID-19 pandemic.
“Hybrid meetings enable shareholders to attend meetings physically and to address the board of companies with questions, while at the same time blending perfectly with Practice 12.3 of the Malaysian Code of Corporate Governance (MCCG),” he said in a statement today.
Practice 12.3 of MCCG encourages listed companies with a large number of shareholders to hold their meetings in remote locations to harness the potential of technology to facilitate voting in absentia and remote shareholders’ participation during their meetings.
The objective of the practice is to encourage the board of public listed companies (PLCs) to take proactive measures to facilitate greater shareholders’ participation.
Amid social distancing and movement restriction guidelines to curb the spread of the COVID-19 pandemic, the Securities Commission (SC) and Bursa Malaysia have allowed PLCs to conduct their general meetings virtually in the aftermath of the imposition of the Movement Control Order.
Delving into the modus operandi of virtual general meetings, Evanson highlighted the tendency for moderators -- often a company secretary or employees of the PLCs -- to “conveniently” overlook hard-hitting, sensitive or controversial questions during virtual meetings.
“This is unlikely to happen at physical meetings whereby shareholders engage in direct face-to-face communication by standing up and posing questions to the board of directors, with the chairman being obliged to answer questions raised on the spot,” he noted.
Although the matter may be resolved by hiring an independent third-party moderator to sieve through the list of questions submitted via chat-box, Evanson said the problem does not stop there.
“Once forwarded to the board, there is no assurance that the board will answer it and the shareholder is unable to physically or vocally insist that the chairman respond to the question,” he said.
Additionally, there are cases of PLCs “bulldozing” the meeting by limiting the duration of question and answer sessions, citing time constraint as an excuse.
“This is unlikely to happen in a physical setting where shareholders could verbally and collectively insist that more time be allotted for the question and answer session,” he added. -Bernama