The hybrid general meeting

In the course of the still recent revision of the swiss corporate law, the legislator has now provided clarity with regard to the modalities of holding a general meeting. In particular, it has recently been questionable to what extent a virtual or hybrid (mixed) general meeting is permissible and how it should be structured. It is now clear that both virtual (Art. 701d CO) and hybrid (Art. 701c CO) general meetings are permissible under certain conditions.

Definition

A virtual general meeting is a general meeting without a venue in digital (electronic) space, i.e. without the physical presence of the participants. The term is defined by the lack of physical presence of the shareholders; the interaction of the participants takes place in virtual space. A hybrid AGM is when an AGM is held physically but with remote participation of certain shareholders by electronic means. The admissibility of such an AGM results from the new provision, which states that shareholders who are not physically present at the venue of the AGM can exercise their rights electronically.

Prerequisites

A basis in the Articles of Association is first required for holding an AGM entirely virtually without a meeting venue. A simple statement in the Articles of Association that the company can also pass shareholder resolutions at a virtual AGM is sufficient. Unless the Articles of Association provide otherwise, the Board of Directors decides whether the AGM should be held virtually or not. The Board of Directors must also appoint an independent proxy when convening the AGM. Listed companies may waive the latter requirement by virtue of their articles of association.

In principle, no statutory basis is required for the AGM to be held on a hybrid basis. In this case, only the Board of Directors is authorized to arrange this form of AGM – in other words, the shareholder has no right to virtual participation in the AGM. However, the articles of association can also expressly grant shareholders this right. A proxy designated by the company must be physically present at the AGM. This proxy exercises the voting rights of the shareholders participating virtually by receiving their instructions electronically in real time.

Technical disruptions

As good as a virtual stream may be, sooner or later a technical problem will arise that makes it difficult to hold the AGM. The law stipulates that if technical faults occur so that the AGM cannot be held properly, it must be repeated. Resolutions that have already been passed (without technical difficulties) remain valid. Only those resolutions that have not yet been passed due to technical problems must be repeated. Technical problems within the meaning of the law do not generally include disruptions to the hardware or software of individual shareholders. However, if there is a widespread problem with a provider that is important for the shareholders, the meeting should be aborted and repeated, not only if a significant proportion of the shareholders use the service in question, but even if a relatively small number of shareholders are affected, as long as the undistorted decision-making process is objectively no longer possible.