Hybrid Shareholder Meetings for Public Companies

ACH Worldwide Ltd
7 min readMar 20, 2022

Written by Ms. Florence Ip, Dr. Kyle Wong

With the advanced communication technology nowadays, public companies can host their shareholder meetings at several locations simultaneously. Public companies, especially those listed in multiple exchanges, often arrange several venues around the globe. In the pandemic period, while all shareholder meetings are exempted from the Prevention Regulation in Hong Kong, public companies still strive to make sure their annual general meetings (AGMs) will comply with the Company Ordinance Rule, Listing Rule as well as the social distancing restriction.

To protect public health, companies are encouraged to limit the number of attending shareholders in any meeting room. No more than 20 people should be present in a single room. Companies must separate their shareholders into different rooms, with not more than 20 people in each room. Under this severe restriction, public companies should consider conducting their shareholder meetings in the hybrid mode.

What is a Hybrid Shareholder Meeting?

Company Ordinance Section 584(1) stipulates that “A company may hold a general meeting at two or more places using technology that enables the shareholders of the company who will not gather at the same place to listen, speak and vote in the meeting.”

Companies can hold their shareholder meetings in a hybrid mode, combining physical locations and online events. Attendees can join a shareholder meeting online so they do not have to travel aboard to gather in one particular place. An electronic communication system will be used to connect all participants in different locations.

How does GreatMeta organise a shareholder meeting?

helix id is an identity verification application tool from Germany that can make the shareholder validating process simple and quick. Shareholders just need to upload their personal identity, shareholding information and email address onto the helix id mobile app. A QR code will be generated on the app. Shareholders present their QR codes at the entrance of an AGM for security checking. When the company can verify their information and the shareholders can enter into the meeting room. Human error can be avoided.

GreatMate has the communication technology that allows participants in different locations to see, listen and talk to each other in a digital network. Participants can attend in real person or in their avatars. The shareholder meeting will be recorded into digital format, transmitted to social media and podcasted live to the public. Shareholders can watch the meeting simultaneously regardless of where they actually locate.

Company may upload the recorded shareholder meeting video onto its website for everyone to play back. The hybrid shareholder meeting improves transparency, convenience and accessibility not only for the existing investors but also for the potential investors too.

The hybrid meeting solution enhances company image, increases company transparency, eliminates travel expenses, optimises business efficiency and lowers operation cost. Less travel reduces carbon emission, and employees can enjoy more time with family. More transparency pursues Corporate Governance. Therefore, hybrid meeting solution complies with Environmental, Social & Governance ‘ESG’ practice.

Hybrid Shareholder Meeting Guideline from the HKEx:

Within six months of the financial year-end, every company shall host an annual general meeting (AGM) for shareholders to obtain up-to-date corporate information and meet the management. AGM time schedule, venue and event details should be published on the company website at least one month in advance with sufficient time for the company to prepare.

Before organising a hybrid shareholder meeting, the company should check with its company’s articles of association and any shareholders’ agreement to see if there is any provision requiring shareholders presence meeting physically.

The Chairman of the board should attend the AGM and also invite the chairmen of the external auditor, the internal audit, remuneration, nomination and any other committees to attend. Those participants should be available to answer questions at the AGM. In addition, independent non-executive directors and other non-executive directors should attend the AGM and develop a balanced understanding of the views of shareholders.

To manage the number of shareholders attending the meeting, shareholders who wish to attend in person are required to pre-register via the company website. The principal place of the AGM and the other places must be disclosed in the notice of the meeting. Companies will send out entrance tickets to shareholders and also encourage them to submit their questions to the management before the meeting.

Quorum and other such requirements must be followed in order to convene the meeting and validate all decisions made in the meeting. Final dividend for each various share classes, cash bonus, payment date, re-appointment of directors as well as auditor, directors’ fees and remunerations will be brought to the AGM for shareholders’ approval via voting.

Shareholders must be able to cast their vote in the meeting. When voting occurs, management should provide adequate explanation of any matters and indicate a recommendation based on the best interest for the shareholders. The voting mechanism can be as easy as raising hands or oral response.

A ‘super-majority vote’ means at least three-fourths of the voting rights of the members holding shares in that class present and voting in person or by proxy at a separates general meeting of members of the class where the quorum for such meeting shall be shareholders of at least one-third of the issued shares of the class. This is unless it can be demonstrated that shareholder protection will not be compromised by a lower voting threshold (e.g. simple majority votes in favour of the relevant resolutions with a higher quorum requirement) and in such case a ‘super-majority vote’ is deemed to be achieved.

According to Company Ordnance Sections 548 & 556, companies can circulate written resolutions for the shareholders. When all shareholders who are eligible to vote on a resolution have signed to it, the resolution is passed. Therefore, the company should provide a proxy form on its company website at least one month in advance to allow sufficient time for shareholders to return the form before the meeting.

Institutional and corporation shareholders must submit a properly executed proxy form or corporate representation authorisation to attend an AGM.

Company shall publish all relevant documents, disclosures, agenda and presentation material on the company website for shareholders to download before the meeting. In addition, the company should also provide a questionnaire form to encourage shareholders, who will not attend the meeting, to raise questions about financial reports and business-related matters. An absent shareholder may appoint a person or a member of the company to attend, speak and vote on his/her behalf.

Company Ordinance Section 596, a member of a company is entitled to appoint any person as a proxy to exercise all or any of the member’s rights to attend, speak and vote at the shareholder meeting. The company’s articles may require the proxy must be a member of the company.

To facilitate the proxy voting process, the company should announce a Voting record date on which the shareholders, who will be entitled to attend and vote at AGM, will be identified. The latest share transfer and registration time must also be provided by the company for shareholders to meet the registration deadline.

Company Ordinance Section 589, only the vote of the most senior shareholder who votes may be counted in the case of joint shareholders of the company. The seniority of a shareholder is determined by the order in which the names of the joint shareholder appear in the register of members of the company.

A shareholder may appoint more than one proxy to represent him/her provided that each proxy is appointed to exercise the rights attached to a different share. When more than one proxy is appointed, the shareholder shall specify the number of shares in respect of which each such proxy is so appointed in the relevant proxy form. In any event, the total number of shares represented by his/her proxy(ies) must not exceed the entitled votes. Shareholders should have clearly stated how they wish to cast their votes in their proxy forms. In the absence of any instructions given in the respect of a resolution, the proxy will be entitled to cast their votes at their discretion or to abstain from voting in respect of the resolution.

Physical proxy forms are the only acceptable form by most companies because of manual operation in the past. With GreatMeta’s data processing technology empowered by Artificial intelligence ‘AI’, digital proxy forms sent to the dedicated company email address are also accepted now. The AI system will verify the shareholders’ information, manage the number of attendees, issue AGM entrance tickets and authorise their voting rights automatically.

Pursuant to the Listing Rules 13.39(4), all resolutions listed in the AGM notice will be decided by poll. In the old days, polling results were handled manually and announced a few days after the meeting. Given the advanced technology applied by GreatMeta, all polling results can be released instantly. All valid decisions made in the meeting can be announced, live streamed on social media, recorded in video and filed immediately.

Hybrid shareholder meetings will have to be rescheduled under the Typhoon Signal №8 or above, or a Black Rainstorm Warning Signal, or extreme weather condition announced by the Hong Kong Observatory. The company must post a new announcement on the company website to notify the shareholders of the date, time and place of the postponed meeting. However, the meeting will be held as scheduled when an Amber or Red Rainstorm Warning Signal is hoisted. Shareholders should consider their own risk to decide whether they would attend the meeting under the bad weather condition.

AGM notice, closure notice of the member register and the preliminary announcement are required to publish in at least one English and one Chinese newspapers which are specified by the Chief Secretary for at least one business day. In addition, 7 copies of each announcement, press release notice, preliminary announcement and AGM notice have to be submitted to the Hong Kong Stock Exchange.

Companies should keep the shareholder meeting videos on the company website for the public to access easily for at least seven years. Increasing company transparency and achieving higher corporate governance standard can attract prospective investors to buy company’s shares.

Please contact ACH Worldwide for more information.