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Lloyds to hold AGM in Edinburgh despite meetings advice

Lloyds Banking Group

Lloyds is to make ‘arrangements’ for shareholders (pic: Terry Murden)

Lloyds Banking Group says it intends to hold its AGM in Edinburgh in May despite government advice discouraging meetings.

It traditionally draws an audience into three figures from around the UK, including banking analysts from London. The bank said it will make ‘alternative arrangements’ for shareholders who choose not to attend.

But the decision to hold the meeting at the Edinburgh International Conference Centre (EICC) may prompt some opposition at a time when hundreds of conferences and other events are being cancelled or postponed, including several at the EICC.

There is also the prospect of a tightening up of free movement as the coronavirus hits a peak at about that time.

Royal Bank of Scotland also intends to go ahead with its AGM which will be held on 29 April at Gogarburn, Edinburgh. It has not given an update on arrangements for the meeting.

The banks argue that they are legally obliged to hold an AGM in some form. Lloyds has moved the date of its meeting from 28 April to 21 May.

The bank says the meeting may be shortened and that it is unlikely to serve drinks afterwards.

In a statement, the bank said: “As of this date, the Government has announced that they are advising individuals not to undertake any non-essential travel, and to avoid large gatherings in venues such as restaurants, clubs and theatres. They are also withdrawing emergency service support for large gatherings.

EICC

Venue: EICC

“While it is not clear how long these measures will be in place, it seems likely that they will affect attendance at the AGM. Shareholders are encouraged to refer to the Government’s official websites for the latest guidance.

“While it is a legal requirement for the company to hold the AGM in order to pass essential shareholder resolutions, circumstances may require the normal proceedings to be shortened or amended and for public health reasons we will not plan to offer refreshments this year after the meeting.

“For shareholders who are not able to attend we will seek to provide alternative arrangements for them to be involved. We will communicate with shareholders before the meeting through the Group’s website. Updates will also be available on the Shareholder Helpline.

“Shareholders are strongly encouraged to exercise their right to vote and to submit their proxies well in advance of the deadline – even if they currently plan to attend the AGM in person – as the situation with COVID-19 may cause disruption to their plans at a later date.”

Legal position

The Chartered Governance Institute together with Slaughter and May have published guidance about company AGMs and the impact of Covid-19 in order to support British businesses and their shareholders during the coronavirus pandemic.

Supported by the Financial Reporting Council, GC100, the Investment Association and the Quoted Companies Alliance, and reviewed by the Department for Business, Energy and Industrial Strategy, the guidance suggests that companies consider their contingency plans in light of the spread of Covid-19.  

Companies need to manage any risks whilst meeting their reporting responsibilities

– Paul George, FRC

Paul George, FRC executive director of corporate governance and reporting said:  “As the AGM season rapidly approaches, companies need to manage the risks presented by the spread of coronavirus transparently whilst ensuring shareholders continue to have the maximum opportunity to have their say. 

“The guidance offers practical support for companies on holding AGMs and they should familiarise themselves with it now to manage any risks whilst meeting their reporting responsibilities.”

The options laid out by the guidance, which reflects UK law and regulation, are as follows:

  • Adapt the basis on which an AGM is held
  • Delay convening the AGM, if notice has not yet been issued
  • Postpone the AGM, if permitted under the articles of association (Articles)
  • Adjourn the AGM
  • Conduct a hybrid AGM, if permitted under the Articles. 

Given that the situation continues to evolve, companies may ultimately have to use more than one of these options.

Peter Swabey, policy and research director at The Chartered Governance Institute advised: “It is important that companies balance the need for pragmatism in the light of the Covid-19 outbreak against their legal and regulatory obligations and good practice.

“In my view, as a general rule, they cannot go very far wrong if they try to maximise the opportunity for shareholders to take part in the meeting. 

“Encouraging proxy voting, the establishment of an online shareholder Q&A for the AGM and live streaming the AGM are all sensible measures to consider and companies may also choose to offer an opportunity for retail shareholders to engage with the board later in the year.

“Companies should also remember that it may become necessary to postpone or adjourn the meeting if the situation changes. 

“A dedicated area on the company website should be established to provide shareholders with the most up-to-date information.”

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