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Frankfurt / Main (dpa) - Protests in front of the hall, loud criticism from shareholders, meeting marathon - board members of major German corporations were largely spared all of this in the Corona year 2020.
Because of the pandemic, the companies completely relocated their annual general meetings to the Internet.
Because the situation remains uncertain, the federal government extended the special regulation for virtual shareholder meetings until the end of 2021. This is not undisputed.
The German Association for Protection of Securities Holdings (DSW) and the European investor protection association Better Finance have analyzed how virtual general meetings worked in Europe - and what that means for shareholder meetings in the post-Corona era.
Their conclusion is clear: a combination of face-to-face events and an online format is required.
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Why are general meetings important?
The general meeting - in short, AGM - is the most important decision-making body of a stock corporation alongside the board of directors and the supervisory board.
Once a year, shareholders have the opportunity to personally express their opinion on the management of their company.
In addition, the shareholders make important decisions: The Annual General Meeting votes on, for example, the distribution of dividends, possible capital increases or elections to the Supervisory Board.
What special regulations apply due to the corona pandemic?
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Typically, the board of directors, board of directors and owners of a company must physically meet to take decisions.
This is what the German Stock Corporation Act prescribes.
But because several thousand people usually come together at such meetings, the legislature allowed stock corporations in Germany to have “virtual general meetings” without changing the articles of association in the 2020 Corona year.
How was that used?
According to the Deutsches Aktieninstitut, 28 of the 30 groups in the German Stock Index chose the digital route for their annual general meeting this year.
The other two DAX companies had already held face-to-face meetings in February - even before the corona crisis had a full impact in Germany.
The pharmaceutical giant Bayer, which on April 28th was the first Dax group to hold a general meeting entirely online, drew a mixed conclusion: the virtual general meeting was much cheaper - the costs would be between a third and a quarter of the usual amount.
The short-term organization of the new format was nevertheless a "feat of strength" and a "mammoth task".
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Which regulations apply for 2021?
Companies, associations and foundations in Germany will be able to forego attendance meetings for the whole of next year.
The federal government extended the special regulation that originally applied until the end of 2020 by a full year.
"It cannot be ruled out that further waves of the pandemic will occur in 2021, that restrictions will persist or that there will even be further restrictions," the Federal Ministry of Justice justified.
Is there any criticism of the process?
The shareholders' association DSW described the pure online AGM in spring as a “temporary emergency solution”.
The "curtailment of shareholders' rights, for example with regard to the right to ask questions or the possibility of contesting resolutions in court" should be "to be assessed critically", said DSW General Manager Marc Tüngler.
The Federal Association of Investment and Asset Management (BVI) ruled: "There were fundamental restrictions on shareholder rights in the 2020 annual general meeting season."
The general meeting "as the supreme control body and mouthpiece of the shareholders" suffered "massively due to the Covid-19 emergency legislation".
Were the shareholders not involved at all?
The shareholders were free to submit questions in advance, but they did not have their say in the online AGM.
In order to loosen up the event at least a little, Deutsche Bank had a moderator present the questions from the shareholders.
The BVI fund association emphasized that it was important that shareholders could express themselves in a debate: "It must therefore also be possible to exercise the right to speak in the virtual general meeting."
Aren't there also advantages of digital general meetings?
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As a supplement to the face-to-face event, Jens Wilhelm, CEO of the Union Investment fund company, can also imagine digital channels in a time after the pandemic.
It makes “perfect sense to enable more shareholders to attend the Annual General Meeting online in the future,” the manager said in the spring.
What do shareholder representatives demand?
The special regulations were justified in times of the pandemic, argues the head of Better Finance, Guillaume Prache.
In the future, general meetings should return to a format that "allows shareholders to exercise all of their rights regardless of how they attend, including the right to ask questions and vote during the general meeting after hearing the responses from the board of directors and supervisory board".
And what do the shareholders want?
According to the study presented on Tuesday, most shareholders in Europe would like a mixture of face-to-face events and online formats.
It is crucial that the shareholders “can be sure that they will be treated equally, regardless of which type of participation in the AGM they choose, be it in person or virtually”, emphasized DSW Deputy General Manager Jella Benner-Heinacher.
© dpa-infocom, dpa: 201215-99-699518 / 2