Annual general meetings, extraordinary general meetings may go virtual permanently

The government could make virtual board meetings, annual general meetings (AGMs) and extraordinary general meetings (AGMs) a permanent feature. It is considering such a proposal and suitable changes could be made to the Companies Act, a government official said. The Ministry of Corporate Affairs (MCA) is looking to permanently shift AGMs, EGMs and board meetings to virtual mode, the official said. “Since this is the new normal, we are considering making it a part of the normal scheme of things rather than a Covid-19 specific relaxation,” the official said.

Since March last year, the ministry has granted multiple relaxations regarding statutory compliances to companies, in light of the disruptions caused by the pandemic, along with several extensions to various deadlines. The concessions include a decision to do away with the requirement of a physical board meeting to pass certain resolutions such as approval of mergers or restructuring and the permission to hold AGMs and EGMs via video conference or other audio-visual means (OAVM).

Earlier this month, the ministry permitted firms to hold AGMs via VC or OAVM till December 31, 2021, subject to existing timelines. Experts feel the move is a step in the right direction, but the ministry would have to design the rules to ensure that shareholders’ interests are protected. This, they said, would require amendments to the Companies Act.


India Inc would welcome the move as it would save time and costs, said Ankit Singhi, partner at Corporate Professionals, adding that it should be made optional along with safeguards protecting shareholder interests. “Lots of companies try to avoid shareholder questions in VC meetings by not giving them an opportunity to speak or not allowing them to register for the Question-and-Answer session,” Singhi said.

According to Anshul Jain, Partner at PwC, providing such flexibility to companies would align India’s corporate laws with those of developed nations, which are considered model jurisdictions for India. “However, we have to ensure that this flexibility is not abused by companies,” Jain said, calling for robust investor grievance redressal mechanisms and governance norms to go along with the change.