The Challenge of Annual General Meetings During Lockdown

It is true that many kinds of meetings can easily be held electronically.

Trustee meetings work well and can easily be arranged and attended. I believe that as we all get used to the new electronic ways, this may well become the newly established way of holding trustee meetings for the future!

It is, however, not as easy with Annual General Meetings, due to the structure thereof.

Management Rule 17 (10) and (11), states the following:

(10) A body corporate may make arrangements for attendance at an annual or special general meeting by telephone or any other method if the method—

(a) is accessible to all members and other persons entitled to attend the meeting;

(b) permits all persons participating in the meeting to communicate with each other during the meeting; and

(c) permits the chairperson to confirm, with reasonable certainty, the identity of the participants.

(11) A person who attends a meeting as provided under sub-rule (10) is considered present in person at the meeting.

The strict and fixed requirements for AGM’s have complications that must be overcome:

• All owners must have access to the necessary equipment and data required to attend an online meeting.
• Establishing a quorum: Since the new legislation is in operation, a quorum is established by the value of each vote, which is the participation quota of each section in terms of the size of the unit in relation to the total square meterage of all sections together. The weight of a vote and for quorum purposes means that a small section has a lower value than a larger section. Before a business can proceed, the value of sections represented must be at least a third of the total value, so as to establish a quorum. The attendance register must be completed and the values calculated, which in large schemes can take a while.
• Time factor: The many items on the agenda and the amount of documentation that needs to be discussed, will add to the time needed for the meeting. However, the budget will be much easier to discuss, as the original document with calculations and formulas can be displayed on-screen.
• Voting: The legislation prescribes: “except for a special or unanimous resolution, resolutions must be adopted by the majority of the votes, calculated in value, of the members present and voting. The outcome of each vote, including the number of votes for and against the resolution, must be announced by the chairperson and recorded in the minutes of the meeting”. This can be even more complicated and time-consuming online!
• Proxies, Nominations, and questions: It is necessary to have these documents at the managing agent 48 hours before the meeting. It will be of paramount importance to have all the documentation prepared before the meeting, and impromptu relaxations by the meeting cannot be allowed.

I believe that if we can overcome the problems, it will be possible to hold AGM’s online, and it may resolve many issues currently experienced with AGM’s, with insufficient quorums, having everyone on the same page with documents (literally!), travelling at night, parking, etc. etc.

It may work so well that it may be the method of the future, -so from our side, we are working on overcoming the challenges!