The Centre for Community Finance Europe (CFCFE) has published a paper exploring the challenges of hosting AGMs during the Covid-19 pandemic.
The research – the first of a two-part briefing on issues facing credit unions planning a virtual AGM – concentrates on identifying and resolving compliance issues.
With the financial year for credit unions in Ireland and Britain ending on 30 September, the sector will have to plan its AGMs for next year when some form of social distancing is likely to be in place.
CFCFE expects credit unions will opt for virtual rather than physical AGMs using teleconferencing tech. Such alternatives were already being looked at before Covid-19, argues CFCFE, as a way of improving access for members who struggle to attend for reasons such as distance or disability.
But some credit unions are concerned about the legality of a virtual AGM, the risk of digital exclusion and the reliability of the technology.
CFCFE notes that virtual AGMs may be hosted using a general video-conferencing platform such as Zoom or GoToMeeting, or by using software from a shareholder meetings specialist such as Civica. Another option is to livestreaming AGMs – although members cannot participate through these channels.
The legality of a virtual AGM, as well as alternatives to in-person voting such as by mail ballot, will depend on the language of each credit union’s rule book, says CFCFE.
There is also the possibility of deferring an AGM until circumstances allow it to be held in the traditional manner with a quorum. This option is available for British credit unions, since the government enacted a temporary deferral of AGMs for all corporate bodies including credit unions.
CFCFE points out that such relief has not yet been publicly mooted in Ireland. However, some model rules permit Irish credit unions to adjourn their AGMs for up to 90 days. This would enable a credit union to hold a limited attendance, in-person AGM in the timeframe required by its rules, but adjourn the full AGM to reconvene on a later date, says CFCFE.
While there is no explicit impediment to a virtual meeting in Ireland, CFCFE says there is some ambiguity of wording around the location of a meeting, which means that a solely virtual meeting might come under challenge. A physical meeting and virtual meeting hybrid could be the solution, it adds.
In terms of voting by mail, CFCFE warns that the voting mechanism in a virtual meeting in Ireland would need to accommodate secret balloting.
A similar scenario can be found in Britain where a virtual AGM needs to be coupled with an in-person AGM. CFCFE adds that for credit unions with rules based on the ABCUL model, there appears to be no barrier to a virtual-only AGM.
Virtual or postal voting appear permissible in Britain, says CFCFE, although some resolutions are not compatible with the latter if the credit union’s rules originated in model rules developed by the Association of British Credit Unions (Abcul).
“The voting mechanism would also need to take account of secret balloting requirements. Credit unions with rules requiring a ballot paper to be involved can either seek to rely on FCA tolerance or use postal votes,” reads the paper.
To address some of the ambiguity around holding virtual AGMs, CFCFE suggests that representative bodies in Ireland and Great Britain lead a co-ordinated approach to obtaining legal clarity from their respective regulators or lawmakers.
