Online shareholder meeting: Cabinet approves draft law for virtual general meeting

Virtual general meetings of listed companies should also be possible after the coronavirus pandemic.

According to government circles, the cabinet approved a corresponding draft law by Justice Minister Marco Buschmann on Wednesday.

The temporary solution should become a permanent solution, said the FDP politician.

Compared to the first considerations, the shareholders' rights, in particular the right to ask questions, have been significantly strengthened.

The Federal Council can now take a position.

The Bundestag will then discuss the government draft.

According to Buschmann, shareholders have the right to speak as in face-to-face meetings.

"In addition, if shareholders' questions are submitted in advance, questions about new issues and, if the meeting period permits, questions about previously known issues may also be asked at the meeting."

Majority of companies plan to return to face-to-face meetings

The Ministry of Justice rated the experiences with virtual general meetings during the pandemic as positive.

Online meetings should therefore be prescribed as an option in the Stock Corporation Act.

The shareholders should ultimately decide on the format.

According to the Ministry of Justice, the face-to-face meeting is still the basic form.

Virtual general meetings must be broadcast completely in image and sound, shareholders must be able to exercise their voting rights electronically, as well as the opportunity to submit motions.

The right to information is usually limited to the general meeting.

“However, the Management Board can also decide that shareholder questions must be submitted no later than three days before the date of the meeting.

Then the company has to answer them no later than one day before the meeting, ”said the Ministry of Justice.

"In this case, the shareholders will have the right to ask questions and ask questions about new issues at the meeting." In order to ensure more transparency, shareholders should receive the report of the Management Board or the core statements from it in the run-up to the Annual General Meeting.

Several associations had criticized the original draft bill from the Ministry of Justice because it would have curtailed shareholders' rights too much.

Above all, they had demanded that shareholders should be able to ask questions during the meeting.

In recent years, large fund companies have increasingly used general meetings as a forum to loudly represent the interests of their investors.

Many Dax companies, on the other hand, are bothered by the often extremely long events, which are repeatedly challenged in court.

According to the DSW shareholder association, the majority of the approximately 600 listed companies in Germany are planning to return to general meetings in the presence of shareholders.