April 15, 2020/NSE
Background
Meetings, whether of companies’ Boards of Directors, or of their Committees, or Management, are an essential aspect of the decision making process in companies, with firm roots in good corporate governance. Members’ active participation at meetings is extremely important, and it is desirable, asit provides attendees with the opportunity to make enquiries, provide inputs and objective criticism, receive clarification, and be generally more informed, to guide decision making. In a bid for companies to constantly keep up with the ever changing business environment and globalization in general, business meetings have been evolving from the conventional round table physical meetings into virtual meetings. Most importantly, due to the challenges and exigencies of doing business in recent times, especially with the occurrence of the COVID19 pandemic, virtual/remote activities have increasingly become a necessity without which many businesses may not attain continuous operational efficiency. As such, virtual meetings have become standard and are utilized by large and small-sized businesses, with participants/attendees spanning different time zones, whilst interacting simultaneously and seamlessly.
Objective
The Nigerian Stock Exchange (The Exchange) notes the legal and regulatory uncertainties that Nigerian businesses may face regarding convening virtual meetings, particularly in the wake of current economic and social constraints precipitated by the COVID-19 pandemic, which underscore the need for companies to adopt a more practical style of holding meetings. This document, which is one of The Exchange’s Guidance and Thought Leadership series, seeks to provide some guidance to the market and other stakeholders on carrying out successful, productive, and rewarding virtual meetings. This Guidance addresses virtual participation for the following meeting scenarios: i. Board, Committee, or Management meetings/briefings that require on-line presentations; ii. Board, Committee or Management meetings with some members physically present at the meeting venue, and others participating virtually; and iii. Board, Committee, or Management meetings where all Members are participating virtually.
Stakeholder Concerns
It is noted that many stakeholders may be concerned that: (a) conducting meetings through virtual participation alone could diminish the ability of the participants to fully participate and have their questions and concerns heard, without the risk of Management exerting excessive control; or (b) that if virtual technology is used to replace physical or in-person meetings, the opportunity for physical and direct engagements, and its attendant benefits, including nonverbal cues, may be lost. Notwithstanding, The Exchange’s position is that upon seeking and receiving proper guidance, every company should decide for itself the best way to conduct its meetings. Our purpose is to ensure that when companies opt for virtual participation in meetings, such meetings are conducted in an accessible, transparent, efficient, and cost-effective manner, while meeting the important business and corporate governance needs of all relevant stakeholders. Each company must consider its own objectives, preferences, and costs, as well as its stakeholders’ concerns in deciding whether to convene and conduct virtual meetings.
