Study of virtual general meetings

What is the status in 2023?

With the expiry of the special regulations for general meetings in accordance with the COVID Measures Act on August 31, 2022, the legislator has now enshrined a permanent legal basis for virtual general meetings in the Stock Corporation Act. The latest development took place in March 2023, when the Federal Ministry of Justice announced that shareholders may now attend general meetings of public limited companies without physical presence at the meeting place. For this purpose, a new paragraph has been included in the Stock Corporation Act. With virtual general meetings, an important step was taken towards the further digitization of company law.

In order to hold a virtual general meeting, it is necessary to create a corresponding basis in the statutes. This basis can either be set out directly in the articles of association or authorized to do so by the Executive Board. In this way, shareholders can decide whether the meeting should take place virtually. However, it is important that this statute or authorization is limited in time and is valid for a period of up to five years. The format of the virtual general meeting is flexible, as there are no restrictions on the content covered.

A transitional provision allows general meetings, which are convened up to and including August 31, 2023, to be held as virtual meetings even without a corresponding provision in the statutes. However, this requires the decision of the Management Board and the approval of the Supervisory Board.

Structure of shareholders' rights

The law fully respects shareholders' rights. Some important aspects include:

Right of appeal

In order to reduce the likelihood of appeals due to technical faults, the provisions of the Stock Corporation Act, which limit the options for appeals in such cases, will be extended to the virtual general meeting. This is intended to minimize risks for companies.

Evaluation of the 2023 Annual General Meeting Season

In the current 2023 general meeting season, public limited companies were therefore faced with the decision whether to hold a virtual general meeting without the physical presence of shareholders in accordance with the new stock corporation law law law or whether to choose the well-known format of the attendance general meeting after three years of virtual COVID general meeting.

After all invitations to the general meetings of all DAX companies had been received since mid-May, an initial empirical study was carried out to find out how 38 of the companies listed on the DAX 40, which are based in Germany and are subject to German stock corporation law, made their decision (Airbus SE and Qiagen N.V., whose registered office is in the Netherlands, were not taken into account).

Majority per virtual meeting

Particularly in light of the critical discussion — particularly in the media — it was eagerly awaited which general meeting format was preferred by the companies and how many of them would return to the attendance general meeting in 2023.

The results of the investigation show that a majority of around three quarters of the companies, i.e. 28 out of 38 companies, have opted for the virtual meeting. In contrast, ten of the DAX companies have chosen the traditional presence format.

In detail, the distribution is as follows:

The evaluation shows that the vast majority of companies regard the new regulations regarding virtual general meetings as practicable. Although there was public skepticism at first, they are sticking to the format of the virtual general meeting even after years of the “COVID general meeting.”

In order to optimally organize virtual events, 3Q, in cooperation with partners, provides a wide range of solutions for event management, technical implementation and guest management.

sources:

Federal Ministry of Justice

GMW Corporate & Competition