How to Hold a Virtual AGM
HOW TO HOLD A ‘VIRTUAL’ ANNUAL GENERAL MEETING DURING THE COVID-19 PANDEMIC
Who this resource is for:
Provincially regulated, non-unionized, non-profit employers in British Columbia.
Who created it:
Copyright © Anders I. Ourom and Pacific Legal Education and Outreach, June 2020, with thanks to Martha Rans and others. Mr. Ourom is a lawyer in Vancouver. Since 1995, his practice has focused on legal and governance advice to societies and charities.
A properly conducted annual general meeting (“AGM”) is a democratic and legal right of the members of every not-for-profit organization’s (“NFPO’s”) members.
Most Canadian NFPOs are incorporated under a provincial statute, or the Canada Not-for-profit Corporations Act (the “Incorporation Statute”). As such, they are required to hold an AGM of the members each calendar year (with a few exceptions), transact the required business, file an annual report/return, and in the case of those that are registered charities, also file an Annual Registered Charity Information Return (T3010).
An enduring tradition of Canadian law is that AGMs, as with proceedings of the courts, Parliament, and provincial legislatures, must be “in person”. Due to the pandemic, that may not possible for the remainder of 2020, and perhaps beyond. Luckily, many Incorporation Statutes now allow “virtual” AGMs, and some provinces such as B.C. (“Incorporation Jurisdictions”) have issued Emergency Orders authorizing such meetings for the time being, regardless of what the statute or bylaws might say.
A ‘virtual’ AGM is one held in whole or in part by video call (Facetime), internet (zoom/skype), or teleconference. There are many platforms (Zoom,GoogleMeet etc.)
Many of the matters discussed below should be considered and decided by the directors (“Board”) of each NFPO, with advice from its management and professionals as needed.
1. CAN MY NON-PROFIT ORGANIZATION HOLD A VIRTUAL AGM?
This discussion addresses only how to hold a virtual AGM, not whether your NFPO has the legal authority to do so. With regard to the latter, please check:
The Incorporation Statute.
Your NFPO’s bylaws – be sure that they are the bylaws exactly as filed with the Incorporation Jurisdiction.
Any Emergency Order that may have been issued by the Incorporation Jurisdiction.
You must review carefully as to what is required, and what is allowed. If your NFPO is legally authorized to hold a virtual AGM, you may – although you should obtain legal advice if you’re unsure, or not clear as to how to do so.
2. WHAT ARE THE RULES AND GUIDELINES FOR HOLDING A VIRTUAL AGM?
The parameters for holding a virtual AGM are to comply with (in order) the Incorporation Statute, any Emergency Order, and the bylaws, and generally to protect members’ democratic and legal rights.
If your NFPO is permitted to hold a virtual AGM, the requirements usually are:
All of the persons participating in the meeting, by whatever means, are able to communicate with each other and if applicable vote – if required, by secret ballot. There may be a mix of members attending in person, by telephone, or by video.
Notice of the meeting must provide clear information to members as to how to attend and participate in the meeting, including instructions on how to vote.
The NFPO holding the meeting must facilitate the use of whichever communications medium will be used. It is the members’ right to notice of, to attend, and vote at the AGM, and the NFPO’s obligation to ensure it is within reason feasible.
Subject to the Incorporation Statute and any Emergency Order, comply with the requirements of the bylaws regarding AGMs.
3. WHAT OTHER FACTORS SHOULD I CONSIDER FOR A VIRTUAL AGM? (SPACE, TECHNOLOGY, ETC.)
The NFPO should make reasonable efforts to enable members to attend and participate in a virtual AGM. Consider carefully the related factors, including:
What technology/platform to use. Teleconference or video/internet conference? Some options are hybrid, and allow both telephone and video/internet participation.
What technologies do members have, and are they able to use? If members don’t have required technology, or aren’t familiar with its use, that will create challenges.
A teleconference may be simplest, but you can’t ‘see’ people, or if needed mute/unmute them. It may be more difficult to register members who are attending, count votes, and ensure non-members aren’t present.
A video conference may require members to have more technology – a desktop, laptop, or mobile phone – and learn how to use it for a new purpose, a ‘virtual’ meeting. (Sometimes participants have two systems, one for the video conference side, one for viewing documents and perhaps voting. Providing documents in advance can help, as can becoming familiar with the capacities of some platforms, e.g. those that allow the chair to control what participants see.)
How many members are likely to attend? The more who are ‘present’, the more complex it may become.
Where do the members live or work? Some communities, particularly smaller and more remote ones, have limited internet bandwidth.
What time? It should be a time that is practicable for as many members as possible, perhaps avoiding “popular” meeting times, such as 9:00 AM or 7:00 PM.
Culture – does your NFPO have a culture of short, business-like AGMs, or longer meetings that may be less focused? This may be a time to keep things as simple as possible, and forewarn members that it may not be the same as a ‘regular’ AGM.
Length – a virtual AGM should probably not exceed one hour, unless necessary. One matter that should be added to the agenda is the NFPO’s response to the pandemic, and its plans looking ahead. Members will want to know.
Cost.
There are numerous technology options available, and the NFPO needs to familiarize itself with the choices, and decide which will work best for it and its members. Experience of similar meetings over the last few months may help. Surveying the members may be informative in terms of what technology they have available and can use.
As with ‘regular’ AGMs, the NFPO has some obligation to make reasonable efforts to facilitate attendance by members. Not all members need to be able to attend, or attend.
Another option for safely holding an AGM, at least until September, may be to hold it outdoors. It allows for physical spacing, and with planning may do what’s needed. First check if there is a limit to the number who may attend, and how they may do so, based on government guidelines and requirements.
4. WHAT ELSE DO I NEED TO CONDUCT A VIRTUAL AGM?
You will need the following to conduct the meeting:
Notice of the meeting, which usually must be sent to members 14 or more days before the date of the meeting – not including the date on which the notice is sent or the day of the meeting, and allowing a reasonable time for delivery. Sending an e-notice 17 or more days before the meeting is about right.
The Incorporation Statute, any Emergency Order, and the NFPO’s constitution and bylaws, as on file with the Incorporation Jurisdiction – they’ll usually have a stamp, to prove they’re authentic. The bylaws will tell you the number of members required for quorum, who may vote, whether any votes must be conducted by secret ballot, how nominations and elections are to be conducted, who will be chair, and related matters.
Clear information for members on how they can attend and participate, circulated in advance, with appropriate support available.
Agenda.
Minutes of the last AGM, report(s) of the directors and management, annual financial statements, auditor’s report if applicable, and report of a nominations committee if applicable. These should be sent electronically, before the AGM.
Any special resolution, for example to amend the constitution or bylaws, that can’t be postponed.
(Possibly) Rules of order for the meeting, tailored to a virtual AGM. The ‘standard’ rules of order often have not been formally adopted by NFPOs, are often unwieldy, and may not cover “virtual AGM” challenges. Presenting and adopting rules of order at the start of a virtual AGM helps provide structure.
Keep good records of what documents are sent, when, to whom and at what address, and how. And, of course, ensure that you have provided for someone to take minutes.
Let the members know if the meeting will be recorded.
The notice of the AGM should state that the address of the NFPO’s head office will be deemed as the ‘location’ of the meeting, as in most cases it must be held in the Incorporation Jurisdiction.
5. WHAT MODES OF COMMUNICATION ARE BEST FOR A VIRTUAL AGM?
It is prudent to provide complete, paint-by-numbers information to members on how to join and participate in the meeting, well in advance – before formal notice is sent. For example:
What technology/platform will be used. You may need two platforms, one for the meeting, one for viewing documents or any needed secret ballot, which may complicate matters. (“Election Buddy” is an example.)
Whether they will need to download the technology of a given provider, and if so details on how to do so. Also, if they’ll need an account.
(Possibly) Set up a ‘test’ of the technology, a few days before the AGM.
Pre-registration – some platforms may require this, and only those who pre-register can participate. This is one way to ensure that only members and invited guests are present, as you have all their names and e-mails, and can match them with the register of members.
Exact and complete information on how to sign in on the day of the meeting – day, time, passwords, etc. It may be wise to ask members to sign in shortly before the meeting starts, and have someone checking messages or answering the phone, and trying to address problems.
How to “raise a hand”, if the technology allows, and that those attending must do so to speak. (Some platforms allow the chair to ‘mute’ participants other than those recognized by the chair. This can be prudent, as long as the chair is attentive to those who wish to speak.)
That members must be voting members in good standing (membership dues up to date) to vote, that a membership can’t be renewed at the AGM, and if applicable how members may renew before the AGM. Also that applications for new memberships won’t be accepted before or at the AGM.
Whether the meeting will be recorded, and if so, what use will be made of the recording.
Emphasizing the time and technological constraints. A legally-acceptable AGM is possible, but perhaps not a ‘normal’ AGM.
If possible, test the technology to ensure that it works.
6. HOW DO I PLAN A VIRTUAL AGM?
Set the agenda in advance, bearing in mind what it must include pursuant to the Incorporation Statute and the bylaws, and any known member concerns. If possible, send a message to the members well beforehand, to tell them about proposed arrangements, and request feedback. Send the draft agenda to members also. It may include:
Identifying the chair.
Roll call/determining that there is quorum. The technology should provide some way for you to identify members who are present, count them, and report.
Adopting rules of order, if necessary.
Approving the agenda.
Receiving and considering the minutes of the last AGM and any intervening general meetings.
Receiving and considering the report of the Board on its activities and decisions since the last AGM.
Receiving the financial statements for the previous financial year, and the auditor’s report on them (if any).
Appointing an auditor, if required.
Electing directors, as required by the bylaws.
Business arising out the financial statements, the auditor’s report, the report of the Board, and any matter about which notice has been given in the notice of the meeting. This could include the NFPO’s COVID-19 response.
Special resolutions to amend the bylaws, if any. (Notice of same must be sent with notice of the AGM.)
Adjourning.
Much of this business is ‘standard. It is advisable to prepare a detailed script for the meeting, including a timeline, names of those who will move and second various required resolutions, who will speak to various matters, and so forth.
7. CHAIR
The chair of a virtual AGM will in particular need to thoroughly prepare, anticipating all likely questions and issues. A detailed script, covering required business and allowing for likely possibilities, may be worth preparing, bearing in mind that in large part it’s the members’ meeting.
8. HOW CAN I HOLD A NOMINATION OR ELECTION DURING MY VIRTUAL AGM?
If possible, avoid holding a contested election of directors this year. That may require clear communication with the members, as the bylaws, past practice, or both may require otherwise. If the bylaws set out processes for nominations and elections, they must be followed – members’ rights.
If nominations and/or a contested election are needed, the communicate with the members well in advance, with clear information about the process that will be used, consistent with the Incorporation Statute and bylaws. If the NFPO would usually conduct nomination and election of directors at the AGM, but needs to do otherwise this year, you should clearly tell members that all nominations must be received in advance. (see below)
Refer to your NFPO’s bylaws and Incorporation Statute, as well as the number and terms of the current directors, to determine how many directors must be elected, for what terms, and how nominations and the election must be conducted. If the bylaws say little about the process for nominations and elections, it implies that nominations will be from the floor at the AGM, with voting ensuing. (If the number of candidates matches the number of vacancies, then all that’s needed is an ordinary resolution to confirm the result.) The Board may still create a committee to solicit nominations, and present a ‘slate’, but in normal times nominations may still be made from the floor.
Often the bylaws allow flexibility, so you should communicate clearly with your members as to the process that will be used. For example, state how many directors the bylaws require, what their qualifications must be, name the current directors (and their terms), say whether any will be retiring, and identify those who hope to be re-elected. State how many directors must be elected at the AGM, for what terms. Then provide a process for nominations, e.g. That a) Nominations must be received by a specified date/time prior to the AGM; b) Nominees must comply with the bylaws; c) A nomination must be signed by two other members; and d) Nominations ‘from the floor’ at the AGM won’t be accepted, unless there are fewer nominees than open positions. The intention being to ensure that the number of positions and of qualified nominees are equal, so that a ‘real’ election need not be conducted.
If the Board plans to present a slate of nominees, to just fill anticipated vacancies, be prepared for the possibility of members insisting on their right to nominate others. This may be a situation where you should obtain legal advice, given that many NFPO-related court cases arise from contested elections.
9. SPECIAL RESOLUTIONS
Any special resolution will require additional planning, given that it likely will address some urgent matter relating to the constitution or bylaws, or borrowing, and that a super-majority (usually 2/3 or 3/4) of the voting members present must vote in favour. There may be limited opportunities for debate. The notice of the resolution (including its text) should accompany the notice of the AGM, and provide some background on why it is needed.
At the AGM, a special resolution must be moved and seconded, followed by debate and then voting. The meeting’s organizers may want to arrange for a “lead off” speaker, to begin the debate, and the chair will need to be attentive to other members who wish to speak to the resolution.
10. HOW CAN I PERFORM A SECRET BALLOT DURING MY VIRTUAL AGM?
If you can avoid holding any secret ballot at your virtual AGM this year, you may want to do so. A secret ballot is necessary when required by the Incorporation Statute or the bylaws, in the latter case often for an election. The bylaws may require a secret ballot for certain types of votes, the members present may have the power under the bylaws to require one (usually by ordinary resolution, a procedural question), or the chair may deem it in the best interests of the NFPO. If so, be prepared. However, if possible avoid having any need for a secret ballot.
It may be impossible to conduct a secret ballot by teleconference, unless members vote separately, for example by sending a message to an independent third party who confirms that they are eligible to vote, counts the votes, and reports.
If may be possible to conduct a secret ballot by video conference, either using internal means where each member votes on her/his screen, and the results appear and are tabulated by a trusted if not independent party, such as the chair. Alternatively, where a second platform is used, just for voting, where again a reliable person receives and tabulates the votes, and reports.
11. FUTURE
It does not seem likely that restrictions on public meetings will be lifted in 2020, or indeed well into 2021. It is possible that your 2021 AGM (at least) will also have to be a virtual AGM, and they may become increasingly common in future in any event.
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