Are virtual shareholder meetings now gone?

Shareholders of companies in Kenya have had two years of virtual annual general meetings (AGM’s).

Media firm Scangroup initiated the era of “virtual shareholder meetings” that allowed companies to fulfil their legal obligations in terms of reporting to shareholders during the covid-19 era.

Those rules were then adopted by every other listed company that then went on to hold meetings with their shareholders “by electronic means”, until now.

A few days ago Olympia Capital had a physical AGM that was attended by about 200 investors. And in two weeks, East African Breweries (EABL) will hold a hybrid AGM that shareholders can attend either in person or follow online.

But with the government not having issued new guidelines on providing for large gatherings is it premature for companies to open up and resume physical AGMs?

In March 2022, Health CS Mutahi Kagwe announced the lifting of COVID-19 face mask rules in public places.  Then in June, masks were reinstated in public when the number of infections went up. The compliance with mask rules is random, with decisions now down to business owners or individuals, as is the case in many countries.

Also in May 2022 Rwanda, which had provided leadership on Covid-19 restrictions, lifted its mask requirements. This was a few weeks before it hosted the Commonwealth Heads of Government Meeting. There, leaders were largely mask-less, with two noticeable exceptions. Uganda’s President Yoweri Museveni has diligently stuck to wearing a facemask and not doing handshakes during the pandemic. The other was Canadian Prime minister Justin Trudeau who caught the virus a few days before the summit.

Kenya's election season, with large rallies and crowds listening to political leaders speak from rooftops of cars, has largely passed with no major outbreaks. The Health Ministry has largely gone silent, and it will now be up to the next health administration to pronounce new rules for the country.

But companies must exercise more responsibility as they draft rules about health issues like face masks and the number of shareholders who can be in a room.

The Chairman of Olympia insisted that shareholders should have masks and wore his for most of the meeting.

EABL has invited its shareholders to indicate if they will follow the AGM livestream online or want to come out to the Safari Park Hotel.

While some companies have sometimes offered to send shareholders data bundles to follow the proceedings online, chances are that most retail shareholders will choose to attend future AGMs in person. This is in anticipation of the gift bags or lunches that are routinely handed out to attendees and which they have lacked for the two years of the Covid-19 pandemic.

This does not mean that companies should discard the virtual options, which remain good for other shareholders, like large investors who are more interested in dividends and governance issues than in a lunch box.

During covid-19, companies enabled shareholders to interrogate the boards and management through questions whose answers were then posted online even before the meeting commenced.

Shareholders can now follow meetings livestreams from their homes or offices without negotiating traffic.

They can register and update their addresses and payment details by SMS on their phones. Some SACCO’s now remits the rebate (dividend) payments as soon as they are approved at the AGM. That allows investors to immediately enjoy a lunch or gift of their choice.