For two years, listed companies have experienced virtual general meetings (AGM) across the board, but rather involuntarily.

The solution for the annual shareholders' meeting, which was born out of necessity, is now to be permanently anchored in the German Stock Corporation Act.

Next Wednesday, the cabinet will deal with the draft law by Federal Justice Minister Marco Buschmann (FDP).

He improved an earlier draft again in favor of the investors.

The rights of shareholders would be taken more into account, for example by extending the right to speak and ask questions during the online AGM, according to the government draft, which is available to the FAZ.

Corinna Budras

Business correspondent in Berlin.

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Overall, the plans for the virtual Annual General Meeting were more closely based on the format of the face-to-face event.

This can be interpreted as a reference to the tried and tested, but they also cause harsh criticism from lawyers.

After all, the lengthy investor events over sandwiches and coffee have taken on a downright deterrent effect in recent years: endless and unproductive discussions, in particular, often drag out the events of the large listed companies for hours.

Deutsche Telekom has just met again for nine hours.

Is the reform a missed opportunity?

"The entire wealth of experience of the past two years has been completely ignored," criticizes Christopher Danwerth, corporate lawyer at the listed Linus Digital Finance AG.

It would have been better to adapt the rules more to the realities of a general meeting.

In this form, the bill is a "missed opportunity," he says.

The situation is similar in the law firm Hengeler Mueller, which represents many companies in the preparation of such general meetings.

"Reflecting the face-to-face AGM in a virtual format is not progress, but a step backwards," says company lawyer Daniela Favoccia.

"If the administrative work is then to be doubled in virtual format, that could practically mean the end of virtual AGM.

The reason for the accusation of "doubling" lies in a reorganization of the previous requirements for the shareholders' right to ask questions: According to the current draft, questions must not only be answered in the general meeting itself, but also beforehand.

"The shareholder can ask and inquire before the general meeting and in the general meeting, the company has to answer 'twice'," explains her colleague Wolfgang Groß, also a corporate lawyer at Hengeler Mueller.

Conversely, however, investors had also resisted the original legal plans because they had not previously provided for a direct exchange of shareholders with the board of directors and the supervisory board during the virtual general meeting.

Investors had the right to speak, but they were not allowed to ask questions.

Instead, they should be submitted electronically only.

With the new draft, Federal Minister of Justice Buschmann is now orienting himself more closely towards the coalition agreement, in which it was promised that shareholder rights in virtual general meetings should be protected “unrestrictedly”, i.e. should not mean a step backwards compared to face-to-face meetings.