Remote participation at shareholders' meetings is facilitated under new Belgian company rules

Certain temporary solutions had previously been enacted to avoid in-person meetings amid the Covid-19 crisis, under Royal Decree No. 4, which was issued by the Belgian federal government on 9 April 2020 (and amended by the Royal Decree of 28 April 2020). These measures, including the possibility for the management body to prohibit physical attendance of shareholders, were only applicable until 30 June 2020. With the pandemic on-going, new measures were needed.

This insight will focus on the implications of the Law of 20 December 2020 (FR NL) for the shareholders' meetings of companies.

General

The management body can now decide to allow shareholders (as well as holders of convertible bonds, subscription rights and certificates issued in co-operation with the company) to participate in the shareholders' meeting via electronic means (for example, via videoconferencing or a web portal). This is the case even if the articles of association do not expressly provide for this possibility. Nevertheless, a physical meeting must also be held at the same time and (as we discuss below) the latest changes do not enable the management body to prohibit shareholders from attending in person.

Conditions

In order for the management body to be able to allow remote participation of shareholders via electronic means, the following conditions must be fulfilled:

• The company must be able to verify the identity of the participants using the electronic means. Videoconferencing software such as Skype, Teams or Zoom allows for such verification.
• The electronic means of communication must enable the shareholders to follow directly, simultaneously and without interruption the discussions, to vote on all items of the agenda of the meeting, and to intervene and ask questions during the meeting.
• However, until 30 June 2021, the company is allowed to use a limited system of communication where the shareholders have the ability to follow the debates and vote without being able to actively intervene and ask questions during the meeting, provided that valid reasons are justified in the convening notice. Shareholders wishing to take part actively in the debates should therefore attend the meeting in person.
• The procedures relating to the remote participation should be clearly and precisely described in the convening notice and on the website of the company.
• The members of the bureau of the shareholders' meeting must still be physically present at the place where the meeting is physically held. However, members of the management body and the auditor can participate remotely, provided that they are able to answer questions via the communication means used.

Considerations

An authorisation in the articles of association is no longer necessary to hold shareholders' meetings via electronic means.

There is, however, a conflict between current restrictions on physical gatherings and the BCCA, which does not allow the management body to prohibit physical attendance of shareholders at meetings (unlike Royal Decree No. 4).

Under Royal Decree No. 4, the management body had been given the power to require shareholders to exercise their voting rights remotely, even if remote voting was not authorised by the articles of association. However, the Law of 20 December 2020 has not amended the BCCA to facilitate or extend remote voting. Shareholders of a NV/SA can cast votes remotely prior to the shareholders' meeting, by letter or via the company's website, by means of a form made available by the company. This possibility must be expressly provided for in the articles of association and is an effective way to reduce physical attendance at meetings.

Tips when convening a shareholder's meeting during Covid-19

The management body cannot prohibit shareholders from attending the shareholder's meeting in person. Hence, the company cannot impose but can only strongly recommend proxy voting or remote voting (if applicable) in the convening notice.

It is also recommended to have one pre-identified proxyholder in the proxy form.

It is a good idea to mention in the convening notice that (i) the company will grant access to the meeting room to shareholders only to the extent permitted in light of the measures taken by the authorities as applicable on the meeting's date; and (ii) that the company is monitoring the situation closely and will disclose all relevant information and additional measures impacting the shareholders' meeting on its website.

The management body can decide to allow remote participation of shareholders provided that the above conditions are fulfilled and taking into account the number of shareholders and the technological possibilities at the company's disposal.