COVID-19 Coronavirus: Corporate Governance

Given the recent recommendations for social distancing in connection with COVID-19 as well as stay-at-home orders that have been implemented in most states, many public companies, including business development companies, and registered closed-end funds will need to address how best to satisfy their obligation to hold an annual stockholder meeting while complying with these restrictions. Companies and funds may elect to hold a "virtual-only" stockholder meeting or a so-called "hybrid" stockholder meeting in line with recent SEC relief that eases compliance with federal securities laws governing annual meetings.

Read our guidance: Meeting Together… Separately: Virtual Board and Stockholder Meeting Considerations (U.S.) - April 10, 2020

In light of the regulations, and the continuation of travel restrictions and mandatory quarantine measures for arriving travelers globally, listed Hong Kong issuers should consider the adoption of technology-assisted virtual meetings, hybrid virtual meetings, or participation via teleconference when interacting with their shareholders provided these measures are allowed under the laws and regulations governing the listed issuer in question as well as its constitutional documents.

Read our guidance: Holding General Meetings Under COVID-19 (Hong Kong) - April 8, 2020

Directors have a vital role in overseeing their company's management of the COVID-19 coronavirus outbreak. Key areas of oversight during the coronavirus crisis include business continuity, human capital, liquidity, financial and operational disclosure matters and other areas of risk management. Directors must adapt their oversight practices to satisfy their fiduciary duties remotely.

Read our guidance: Considerations for Boards of Directors (U.S.) - April 7, 2020

Companies should consider whether to hold their usual shareholder and board meetings as planned, or whether rescheduling meeting dates, changing meeting locations or switching to “virtual-only” or partially virtual meetings may be appropriate in these circumstances.

Read our guidance: Considerations for Board and Shareholder Meetings (U.S.) – March 16, 2020 (Updated April 7, 2020)

In light of the global COVID-19 pandemic, some public companies in Hong Kong are struggling to meet their financial reporting obligations. For these companies, the risks associated with any delays in disclosing their financial information should be minimized due to public companies’ disclosure obligations with respect to inside information under the SFO. Further, there is a group of individuals who may be concerned with an increased exposure – the board of directors and, in particular, the audit committee.

Read our guidance: Reporting Obligations for Hong Kong Public Companies (Hong Kong) - April 3, 2020

The Government's announcement of new measures on 23 March 2020 requiring people to stay at home, except for very limited purposes, and to stay two metres away from other people has had an effect on the ability of public companies incorporated in the United Kingdom to hold annual general meetings (AGMs). In the UK, under the Companies Act 2006 there is a requirement for public companies to hold an annual general meeting within six months following the end of their financial year. Therefore a large number of public companies, having a 31 December financial year end, are required to hold their annual general meetings by 30 June 2020. The following are some considerations for public companies in relation to convening and conducting their AGMs.

Read our guidance: COVID-19 and its Effect on the AGM Season for Public Companies in the United Kingdom (UK) - March 27, 2020