Overview of the Nigerian Stock Exchange’s Guidance on the Conduct of Virtual Board, Committee and Management Meetings

Overview of the Nigerian Stock Exchange’s Guidance on the Conduct of Virtual Board, Committee and Management Meetings

On 15 April 2020, the Nigerian Stock Exchange (NSE) released the Guidance on Companies’ Virtual Board, Committee and Management Meetings (the Guide) to aid companies in complying with the provisions of corporate statutes when holding their meetings during COVID-19 pandemic. This Briefing Note summarises the highlights of the Guide.

1. Objective of the Guide

The COVID-19 pandemic has resulted in disruptions to the business operations of many companies. In response to this, the NSE issued the Guide to direct companies on conducting board, committee and management meetings virtually in view of the lockdowns and meeting restrictions instituted by the federal and Lagos State governments. Lockdowns instituted by governments all around the world to constrain the spread of the virus has made it imperative for companies to consider alternatives to the conventional round table meetings. The Guide will assist stakeholders to identify and adopt best practices and comply with applicable corporate governance standards in conducting their virtual board and committee meetings.

2. Defining Virtual meetings

The Guide defined virtual meetings as meetings that take place when  people, irrespective of their physical location, are able to communicate effectively during pre-scheduled teleconferences, web conferences, or video conferences, with the ability to utilize video, text or audio features via the meeting medium, whilst being in the same virtual space for a specific period. There are circumstances which may necessitate utilising virtual means of conducting and holding meetings such as situations where there is an emergency meeting or an urgent situation arises and where Board, Committee, or Members of Management cannot be physically present due a lockdown period due to COVID-19.

What the Companies and Allied Matters Act says

Section 263(1) of the Companies and Allied Matters Act, Cap. C20 LFN 2004 (CAMA) provides that directors may meet together for the despatch of business, adjourn, and otherwise regulate their meetings as they think fit. However, the CAMA is silent on the issue of virtual meetings and does not expressly prohibit virtual meetings. This is not surprising given that at the time CAMA was enacted in 1990, virtual meetings were not a consideration for the legislators enacting the law.

3. Recommendations of the NSE on the Conduct of Virtual Meetings

The NSE recommends that where the constitutional documents of a company or its Board, Committee, and Management Charters or Terms of Reference are silent on the virtual meetings, these documents should be amended to provide for and authorize virtual meetings. However, holding a company meeting should be in accordance with the provisions of the applicable corporate statutes and the company’s constitutional documents. The NSE further advises on the responsibilities of Company Secretary, virtual attendees and the chairperson in conducting the virtual meeting.

The Company Secretary

Whilst facilitating a virtual meeting, the Company Secretary is advised to among others:

• set out an agenda, which clearly sets out the matters to be considered, for the Chairperson’s approval;
• arrange, with the chairperson’s approval, for the participation of and the presentation(s) to be made by external attendees who are not Board or Committee members, or for their matter(s) to be addressed at the beginning of the meeting, unless otherwise requested by the external attendees;
• confirm, ahead of the meeting time, the names, number and identity, of those that will be participating virtually;
• ensure the availability of alternative means of reaching participants, who lose their connection during the meeting in order to enable their reconnection;
• ensure that all meeting materials are circulated ahead of time in line with CAMA and the Board/Committee or Management’s Charter or Terms of Reference, to give participants sufficient time and opportunity to read such materials and prepare for the meeting; and
• ensure that the required equipment is proactively procured and made available for the virtual meeting, i.e., a conference phone, call-in number/links for accessing selected meeting media set up, Internet connectivity, microphones strategically placed around the room, or other equipment that may be necessary to facilitate a hitch free meeting.

The Virtual Attendees

The Virtual attendees are advised to among others:

• promptly notify the Company Secretary of their intention to attend a part of, or the full meeting virtually;
• ensure confidentiality and sensitivity of information received and ensure that the locations from which attendees are joining the meeting are private, so that conversations are not overheard by third parties;
• give due attention to matters being discussed and as much as is practicable, avoid distractions and multi-tasking;
• log into or call in to the meeting early to check and ensure that all software and connections are working properly; and
• ensure they have sufficient understanding of the technologies to be used to connect with/support a virtual meeting before the meeting, so as to limit any obstructions to their participation in the meeting, attributable to issues that could not reasonably have been anticipated before the meeting.

The Chairperson

The Chairperson or facilitator of the virtual meeting is advised to among others:

• set expectations at the beginning and establish meeting goals and objectives;
• create rules of engagement, i.e., regarding muting and whether cameras should be switched on;
• remind/ encourage all virtual attendees to adhere to their responsibilities, including those outlined above;
• adhere as practicably as possible, to the timeframes stipulated in the agenda;
• remind participants of virtual meeting protocols and expectations for staying engaged to ensure successful virtual interactions; and
• adopt and communicate the method by which attendees should signal their desire to ask a question or comment on an item. Where video facilities are in use, the attendee’s hand should be raised in a visible manner.

4. Technical Considerations

The Guide encourages the Company Secretary to ensure that good technical support is available for meetings. The Company Secretary is also encouraged to promptly notify the company’s technology team/ personnel of the details of the virtual meeting (i.e., date and time), as well as the technology media to be used. An appropriate and practical means of contacting attendees and the technical team, i.e., phone number, text message, etc., should also be agreed upon in the event of any disruptions, and where technical assistance is required.

On the other hand, virtual attendees are to ensure that they are well equipped and prepared to use the necessary technology tools to participate virtually.

5. Other Relevant Considerations

In deciding whether to implement a virtual meeting, NSE advises companies to take the interests of all relevant stakeholders into account and consider the virtual component of a meeting to enhance participation. Additional factors to be taken into consideration include, providing adequate technology to reach all stakeholders willing to participate in the meeting, considering whether virtual meeting is in the best interest of majority of our stakeholders, putting in place plans to ensure that all stakeholders have opportunities to ask questions, ensuring the appearance of the virtual attendees and their location when attending the virtual meeting.

6. CONCLUSION

The NSE advises that every company should decide for itself the best way to conduct its meetings as the purpose of the Guide is to ensure that when companies opt for virtual participation in meetings, such meetings are conducted in an accessible, transparent, efficient, and cost-effective manner, while meeting the important business and corporate governance needs of all relevant stakeholders.

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