Virtual Annual Meetings Your Questions Answered
After more than a year of trial and error, it’s becoming clearer what works — and what doesn’t — when it comes to virtual annual meetings. Here’s the latest you need to know.
By Paula Chin
Does any part of the virtual meeting still have to be held in a physical location?
No. The temporary amendment to New York’s Business Corporation Law (BCL) allowing all-virtual annual meetings was made permanent in November 2021, a month before it was set to expire. You should check your bylaws to make sure there is no conflict with the BCL, and consider amending them if there is.
How should the virtual-meeting notice be sent, and should it include information about the format?
The notice should explain that the meeting will be entirely virtual, identify the platform being used and include the necessary credentials to log in to the virtual meeting. A dial-in phone number for shareholders who want to call in should also be provided.
Is a virtual quorum different from a regular one?
No. That said, the quorum needed to recognize the legitimacy of the voting can be made up of people attending the meeting coupled with sign-and-submit proxy forms. You should mail the annual meeting notice at least 30 days in advance of the meeting along with a proxy form — a statement by a shareholder authorizing another person (the proxy holder) to vote his or her shares if the shareholder will not attend the meeting. If you also email the notice, attach the proxy form. As with in-person meetings, collecting enough proxies to establish a quorum makes life easier. Once the threshold is met, the quorum is valid — even if, say, more than half the shareholders leave the meeting before elections are held.
What’s the process for handling board nominations virtually?
In order to control any virtual chaos, you’ll want to pay attention to the method used for shareholders or unit-holders to nominate board directors at the annual meeting. Depending on what your bylaws permit, with the meeting notice you can include an invitation for nominations with a deadline for them to be submitted, either by email or snail mail. Explain that the candidates’ names, bios and personal statements will later be distributed, and if you’re holding a virtual meet-the-candidates event, include the date. To make things easier going forward, boards should consider amending their bylaws to mandate advance nominations.
How and when should virtual voting be conducted?
Unlike in-person meetings involving written ballots, the BCL amendment allows shareholders to vote by text or via chat room during the meeting. Shareholders can also vote electronically using the PDF proxy form included in the notice of meeting, which indicates how the proxy holder’s vote will be cast, or using a general proxy allowing the holder to vote on behalf of the shareholder without restriction.
What’s the best way to allow and conduct questions from the virtual floor?
In regular annual meetings, there is usually time allotted for residents to ask questions from the floor, and it’s the same with virtual ones. How you do this in a virtual setting might be different, though, particularly in larger buildings. One way is to solicit questions before the meeting, providing an email address or phone number to do so, and then addressing the questions during the meeting. This will help minimize chaos and keep the meeting from running on forever. In smaller buildings where everyone knows each other, questions can be taken from the floor. How residents are recognized depends on the virtual platform being used, and you’ll want to familiarize yourself with the one you are using.
There are many virtual platforms. Are there any features that will make conducting virtual meetings easier?
One thing you want to avoid is hearing background noises or conversations going on in various households. Some platforms allow the host — most likely your managing agent or attorney — to automatically mute all participants, who can talk only when given permission; the host can also mute them as needed to reduce cross-talk and interruptions and to move things along when people raise issues that have already been addressed. To avoid electronic glitches, boards can always hire a tech coordinator to run the meeting for them.