In the wake of the COVID-19 pandemic, many organisations are considering whether they can hold general meetings using technology, or if they need to instead delay upcoming meetings.
The answer to this question will vary between organisations and depends on several factors. Whether an organisation can hold a general meeting using technology will depend on applicable legislation, its governing document and the approach of its regulator.
We strongly recommend that organisations seek specific advice as to whether they can hold an upcoming general meeting using technology.
What does your governing document say?
An organisation’s governing document will influence whether a general meeting can be held using technology.
If an organisation’s governing document includes a clause expressly permitting general meetings to be held using technology, the organisation can proceed to hold a general meeting in line with that clause.
Alternatively, if an organisation’s governing document explicitly disallows the use of technology for general meetings, the organisation may need to consider postponing its meetings until they can be held in person. Members may question the validity of resolutions passed at general meetings that were not validly held.
If the governing document is silent on this point, depending on the type of organisation in question, it may be able to look to legislation and other forms of relief to support it holding its general meeting using technology.
Is there any COVID-19 relief available?
In response to COVID-19, the Federal Treasurer has provided short-term regulatory relief from provisions relating to company meetings under the Corporations Act 2001 (Cth). The Corporations (Coronavirus Economic Response) Determination (No. 1) 2020 (Cth) enables companies to hold annual general meeting (AGMs), and other meetings prescribed under the Corporations Act, entirely electronically. The legislative instrument commenced on 6 May 2020 and is expected to remain in place until 21 March 2020, following a recent announcement from the Treasurer.
Unfortunately, the Determination provides minimal relief to companies that are registered charities. Charities registered with the ACNC that are public companies limited by guarantee are generally not required to hold meetings (including AGMs) in accordance with the provisions of the Corporations Act. Section 111L of the Corporations Act sets out a complete list of the provisions that are not applicable to registered charities. Registered charities instead need to comply with the ACNC Governance Standards.
In most cases, charities will not be able to use the electronic meeting relief offered by the Determination given that their meetings are not required to be held pursuant to the Corporations Act. An exception applies where a charity is required to hold a meeting under a provision of the Corporations Act and that provision is not excluded by section 111L.
Under the Associations Incorporation Act 1981 (Qld), incorporated associations in Queensland are usually required to hold an AGM within six months of the end of their financial year. However, in light of the effects of COVID-19, the Office of Fair Trading has granted a grace period of six months from the end of an association’s financial year to hold its AGM, without the need to make a written application.
Further to this, the Associations Incorporation Act has recently been amended to allow incorporated associations to hold meetings, or permit members to take part in its meetings, by using any technology that reasonably allows members to hear and take part in discussions as they happen.
Available concessions for associations incorporated in other states and territories in Australia, will depend on the regulator for that state or territory.
Do the Australian Charities Not-for-profits Commission Governance Standards assist charities?
Charities can take some comfort from ACNC Governance Standard 2, which provides that charities must ‘take reasonable steps to be accountable to their members and allow their members adequate opportunities to raise concerns about how the charity is run’.
- the governing document of a charity does not explicitly require a meeting to be held in person, and
- the meeting is not a type that the Corporations Act and therefore, the COVID-19 legislation applies to,
it may be arguable that holding a meeting in the current COVID-19 environment where members are invited to attend and participate via some form of technology would still comply with ACNC Governance Standard 2.
Governing documents and applicable legislation will differ between organisations so unfortunately there is no ‘one size fits all’ answer to this question.
Unsure whether your organisation is permitted to hold electronic meetings? Contact Cooper Grace Ward for advice on this issue.