For many public companies and non-profit organizations (for ease, we’ll refer to them as ‘organizations’), we’re in the season for meetings, whether it’s a quarterly board meeting or an annual meeting of stockholders or members. With the current inability to gather in groups due to the unprecedented world pandemic, the typical in-person meeting must quickly morph into a virtual or remote-only format.
The problem: Both public companies and non-profit organizations generally are not permitted to hold annual or special meetings of stockholders or members by remote-only communication.
The solutions: In response to the COVID‑19 crisis and in order to ease the facilitation of conducting board, stockholder and member meetings while in-person interactions remain restricted or inadvisable due to health and safety concerns, Governor Baker and the Massachusetts legislature have temporarily suspended the prohibition upon both public companies and non-profit organizations holding remote-only meetings for the period from March 30, 2020 to sixty (60) days after the end of the Commonwealth’s declared state of emergency (see here and here).
Below, we discuss several practical considerations and insights to keep in mind as you plan your organization’s remote-only meeting. These considerations and insights are geared towards Massachusetts public companies and non-profit organizations, but we believe these considerations may be adapted for other entities.
1. Amend Governance and other Related Documents, as needed
Review your organization’s governance documents (such as the operating agreement, charter, constitution and bylaws) for all procedures related to board, stockholder or member meetings. To the extent necessary, amend these documents and have the board authorize remote-only meetings.
2. Determine Timeline and Voting Logistics
Review Your Timeline
As you comb through your organization’s governance documents and any relevant laws and regulations for timing constraints, create and communicate to all relevant parties the timeline for the remote-only meeting. Take careful note of the requisite meeting notice; filing dates (if any); mailing dates; and printing dates if materials need to be printed beforehand. If relying on third-party assistance to print documents or coordinate the meeting, communicate your timeline and deadlines to them, as soon as possible. It’s important to remember these businesses are also impacted by COVID-19 and may be operating on slower than usual turn-around times.
It is important to thoroughly consider the dynamics and logistics of “virtual voting.” As your organization develops its virtual voting plan, please consider:
- Will voting constituents vote on all proposals at once, or will the vote be rolled as each proposal is discussed?
- How will you ensure that only constituents with voting rights are submitting votes?
- If guests or non-voting constituents attend the meeting, is there a feature to prevent them from voting or asking questions?
- How will votes be recorded?
- What happens if a voting constituent loses their control number or meeting password?
- What technology-support options are available if the organization or the voting constituents have technical difficulties during the meeting?
- What documents should be available during the meeting, and to whom? Where will those documents be posted and how can they be accessed?
3. Modify Meeting Format and Flow
Keep in mind you may need to modify the usual format and flow of your meeting. We’re including a few suggestions below that you may consider implementing:
Use a Moderator
Consider delegating someone other than the Chairman to moderate the meeting. This moderator will receive and screen questions and then can ask and position the question, as appropriate, to the Chairman or Board. The moderator should also screen for irrelevant questions and aggregate repetitive or similar questions to enhance the flow of the meeting.
Manage the Mute
If you’ve ever attended a virtual happy hour or meeting – and by now, who hasn’t?! – you may have experienced the common pitfalls of background noise and participants talking over each other. Familiarize yourself with the feature to mute all participants, so that you have the ability control the meeting, designate the speaker, and eliminate unwanted background noise.
Communicate the Road Map and the Rules of the Road
A remote-only meeting is likely to be unfamiliar to attendees. It is helpful to provide supplemental and detailed instructions to facilitate a smooth meeting. Consider sending a notice or email to holders including of the following information:
- Information Required to Access Meeting. Describe log-in process, password, control number and other information required to access the meeting.
- Technical Support. Provide contact information for in-meeting technical support.
- Procedure for Asking Questions. Set out the procedure for asking questions during the meeting (e.g., questions submitted in a private message to moderator).
- Accessibility of Supplemental Documents. Instruct how to access relevant documents during the meeting.
Test-Drive the Meeting
To avoid day-of meeting disasters, run a full test-drive of the meeting at least a week before scheduled. Invite all presenters to participate and enlist faux-attendees that can offer feedback on the process and platform. After the test-drive, debrief will all participants to identify potential issues and areas that may be improved.
4. Create Clear Communications
Be Cognizant of Time Zones
Incorporate relevant time zone information into all communications. As the remote-only meeting is not held at a physical location, it’s critical to set the meeting’s time zone for ease of communications. Additionally, consider the location and time zone of attendees – an 8:00 am Eastern time virtual meeting may not be appreciated or well-attended by Pacific time zone attendees.
Clean Up your Proxy Card and/or Notice
Many organizations rely on prior years’ precedent when drafting its notice and cards. Take the time to closely review all communications to ensure there are no contradictory statements or instructions that may lead to confusion with the remote-only format. With voting instructions, we recommend eliminating any reference to an “in-person meeting.” Instead include “Vote By Internet” with the following two options, as applicable: (i) instructions for voting before the meeting, and (ii) instructions for voting during the meeting. With the notice, emphasize that the meeting will be in a remote-only format.
Coordinate with External Speakers
If a consultant, auditor or advisor will be presenting at the meeting, before sending notice, schedule and coordinate the meeting time and date with the individual to confirm his/her availability.
5. Consult an Attorney
Finally, we recommend that you consult an experienced attorney for customized guidance on your virtual meeting process. Note, this post focuses on virtual meetings for Massachusetts organizations. If you want to learn more about the issues in this article as they relate your business, a Massachusetts limited liability organization, a Massachusetts nonprofit, or for entities located in Delaware or elsewhere – please feel free to reach out to a Burns & Levinson attorney.
David Amidon has almost 30 years of experience helping a wide array of clients, serving as both general counsel and transactional counsel to a broad and diverse group of entrepreneurs, start-up and emerging ventures, middle-market companies, private equity and venture capital funds, investment banking firms, private investors, and public companies. He can be reached at firstname.lastname@example.org or 617.345.3578.
Amanda Adam is an associate in the Business, Finance and Transactions department and a member of Burns & Levinson’s corporate practice group. In her pro bono work, Amanda has represented clients with asylum and immigration matters, CORI sealings, and low-income debt cases. She can be reached at email@example.com or 617.345.3556.