Commercial & Business, Insights, Trusts & Estates

How do you find a quorum in a pandemic?

How do you find a quorum in a pandemic?

With the country still being in an effective lockdown for the next few weeks, companies, incorporated societies, charities and other organisations may face difficulties satisfying their meeting obligations.

Constitutions and rules often require that meetings be held at certain times or specify a minimum number of attendees to achieve a quorum.  Quite how these can apply in a lockdown scenario largely comes down to interpretation of those governing documents and some of them may provide for meetings to be held by way of video conference.  Others don’t.

Some constitutions may not require that meetings be held in a single place.  In such situations it may be possible to hold a meeting at one or more physical venues with others attending remotely.

However, most constitutions will require a specific number of members to be “present” at a meeting for a meeting to be valid.  This has been taken in the past to mean that actual presence is required for a quorum with proxy votes not being counted.

Where this can’t be done, it may well be preferable to hold a postal poll or virtual meeting to approve annual financial statements.  Depending on what the restriction s eased to in the coming weeks, it might be possible to convene a valid and effective meeting with a combination of small number of physically present people as well as postal proxy or online voting.

Even if there isn’t strict compliance, however, it seems likely that courts and government agencies would look favourably on this compared to having nothing at all.

If you go down this route, out advice is:

  • Keep shareholders and members fully and promptly informed ab out changes to plans.
  • Ensure that the meeting format gives shareholders and members and shareholders a good opportunity to ask questions and engage in discussion.
  • Defer all non-essential matters to a later date and only cover off what you absolutely need to as a matter of immediate priority.
  • Review your constitution or rules to ensure that you have the flexibility to hold meetings effectively if something like this happens again.