corporate insights...2. securities and exchange commission’s (sec) circular i. circular to capital...

A PUBLICATION BY KENNA PARTNERS APRIL 2020

AN EVALUATION OF THE CAC AND SEC GUIDELINES ON THE HOLDING OF COMPANIES MEETINGS IN NIGERIA

CORPORATE INSIGHTS

2 www.kennapartners.comAN EVALUATION OF THE CAC AND SEC GUIDELINES ON THE HOLDING OF COMPANIES MEETINGS IN NIGERIA

Contents

INTRODUCTION

OVERVIEW OF THE GUIDELINES, GUIDANCE AND CIRCULARS

1. Corporate Affairs Commission’s (CAC) Guidelines on Holding of Annual General Meeting

(AGM) of Companies using Proxies of March 26, 2020 (the CAC Guidelines);

2. The Securities and Exchange Commission’s (SEC) Circulars:

i. Circular to Capital Market Stakeholders on Covid-19 of March 24, 2020; and

ii. Circular to all Regulated Entities and the Market of March 31, 2020 (the SEC Circulars)

3. The Nigerian Stock Exchange’s (NSE) Guidance on Companies’ Virtual Board, Committee, and

Management Meetings of April 15, 2020, (the NSE Guidance)

4. Statutory and Regulatory Consideration of Virtual Meetings

ISSUANCE OF NOTICES

QUORUM OF MEETING

Roles of Officers of Companies in Virtual Meetings

Company Secretary

Chairman

Attendees

CONCLUSION AND RECOMMENDATIONS

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3www.kennapartners.com AN EVALUATION OF THE CAC AND SEC GUIDELINES ON THE HOLDING OF COMPANIES MEETINGS IN NIGERIA

AN EVALUATION OF THE CAC AND SEC GUIDELINES ON THE HOLDING OF COMPANIES MEETINGS IN NIGERIA

Due to the continued spread of the COVID-19 virus, and the health and safety measures put in place by the Federal Government, the holding of the AGM, BoD and Management meetings in compliance with existing laws have proved uncertain.

Introduction

For months, the world has been on eggshells due to the outbreak of the COVID-19 virus.

The World Health Organisation (WHO), the Nigeria Centre for Disease Control (NCDC)

and other notable public health bodies have recommended the preventive policy of social

distancing to curb the spread of the virus. Thus, the outbreak of the COVID-19 pandemic has

raised several regulatory concerns in the realm of corporate affairs which has necessitated

industry regulators to issue interim measures to regulate the activities of stakeholders

during the pandemic. Concerns on the holding of companies’ meetings have inspired the

publication of the following:

i. Corporate Affairs Commission’s (CAC) Guidelines on Holding of Annual General Meeting

(AGM) of Companies using Proxies of March 26, 20201 (the CAC Guidelines);

ii. The Securities and Exchange Commission’s (SEC) Circular to Capital Market

Stakeholders on Covid-19 of March 24, 2020, and also Circular to all Regulated Entities

and the Market of March 31, 2020 (the SEC Circulars);2 and

iii. The Nigerian Stock Exchange’s (NSE) Guidance on Companies’ Virtual Board, Committee,

and Management Meetings of April 15, 2020, (the NSE Guidance).3

The CAC Guidelines was initially aimed at the Annual General Meetings (AGM) of public

companies but was recently amended to apply to all companies. The SEC Circulars provided

advise on COVID-19 and its attendant effect on capital market operations, whilst the NSE

Guidance focused on the proper utilisation of virtual tools and proper corporate governance

practices in conducting virtual Board, Committee and Management meetings.

Overview of the Guidelines, Guidance and Circulars

Meetings of a Company – Annual General Meeting (AGM), Board of Directors Meeting

(BoD) or its Committees, Management meetings amongst others are an avenue for

discussions and decisions making on the issues relating to the Company. It is pertinent that

the decisions made are in a conducive environment with active stakeholders’ participation

and compliance with the laws and regulations while upholding good corporate governance

practices.

Due to the continued spread of the COVID-19 virus, and the health and safety measures

put in place by the Federal Government, the holding of the AGM, BoD and Management

meetings in compliance with existing laws have proved uncertain. The pandemic has caused

companies to devise creative ways of carrying out their activities, meetings inclusive. As

such, virtual meetings have been the new normal for Companies.

1. The Corporate Affairs Commission’s (CAC) Guidelines of March 26, 2020 (CAC

Guidelines)

The CAC Guidelines made provisions primarily for the holding of AGMs specifically on

such issues as attendance by CAC representatives, business transacted at AGM, notice,

attendance by proxies, and quorum.

1 CAC, Guidelines on Holding Of Annual General Meetings (AGM) of Public Companies Using Proxies at < https://www.cac.gov.ng/3956-2/> accessed on April 16, 2020

2 SEC, Circular to Capital Market Stakeholders on Covid-19 of March 24, 2020, https://sec.gov.ng/circular-to-capital-mar-ket-stakeholders-on-covid-19/ and also Circular to all Regulated Entities and the Market of March 31, 2020 https://sec.gov.ng/circular-to-all-regulated-entities-and-the-market/

3 NSE/REG/R&I/GTL1/CVM1/04/20


The Guidelines stipulate as follows:

In view of the COVID-19 pandemic, companies can hold their Annual General Meetings by taking advantage of section 230 CAMA on the use of proxies. The following should guide the companies on the procedure and conduct of the AGM:

a. The approval of the CAC shall be obtained before such a meeting is held. The application can be submitted to the head office in Abuja or any of the branch offices in any of the States;

b. CAC shall send its representative(s) as observer(s) to the meeting;

c. The meeting shall only discuss the Ordinary Business of an AGM as provided in section 214 of the Companies and Allied Matters Act (CAMA);

d. Notice of meeting and proxy form shall be sent to EVERY member in accordance with the requirements of CAMA. Companies will be required to provide the CAC with the evidence of postage or delivery of such notices after the meeting;

e. All the members shall be advised in the notice that in view of the COVID-19 pandemic, attendance shall only be by proxy with names and particulars of the proposed proxies listed for them to select therefrom. The invitation shall be issued at the companies’ expense as well as the stamp duties which shall be prepaid by the company. The proxies need not be members of the company.

The company shall be guided by the provisions of its Articles or CAMA as regards to the quorum. However, for the purpose of determining quorum, each duly completed proxy form shall be counted as one.

However, a review of the CAC Guidelines shows that it could be in conflict with provisions

of the Companies and Allied Matters Act (CAMA) on the use of proxies.4 For example,

Section 230 (1) of CAMA5 stipulates that “Any member of a company entitled to attend and

vote at a meeting of the company shall be entitled to appoint another person (whether a

member or not) as his proxy to attend and vote instead of him.”

It is apparent that the power to appoint and choose proxies lies with members of the

company. Thus, by providing a limited number of Proxies from which the members are

to choose, members may feel that they have been indirectly shut out to select any other

person of their choice to represent their interests at such meetings. Also, the requirement

that a CAC representative must be in attendance at such meetings needs to be noted to

avoid breach and possible sanctions.

2. Securities and Exchange Commission’s (SEC) Circular

i. Circular to Capital Market Stakeholders on Covid-19 of March 24, 2020

The SEC announced that for the pendency of the COVID-19 pandemic, its operations shall

be conducted based on the following:

1. Filing of Applications

All applications, for the time being should be made electronically to the following dedicated

email addresses:

a. Registration of funds and other relevant filings - [email protected]

b. Registration of securities, Public Offers, Mergers and Acquisition, Debt Issuances,

etc.- [email protected]

Fresh applications for registration of Capital Market Operators are suspended until further

notice. However, pending applications and requests by CMOs for update of information

would be processed via [email protected].

4 Cap C20, Laws of the Federation of Nigeria 2004

5 Ibid

However, a review of the CAC Guidelines shows that it could be in conflict with provisions of the Companies and Allied Matters Act (CAMA) on the use of proxies.


2. Filing of Returns

All returns shall be filed electronically at the following dedicated email addresses:

a. Public Companies - [email protected]

b. Capital Market Operators - [email protected], [email protected],

[email protected],[email protected],[email protected],

[email protected], [email protected], [email protected]

c. 5% and above shareholding - [email protected]

d. AML/CFT- [email protected]

The Commission has approved a 60-day extension, in the first instance for public companies

and capital market operators to file their 2019 annual reports and Q1 2020 reports.

3. Meetings

Public companies are advised to take appropriate precautionary measures as recommended

by the Federal and State Governments as well as the Nigerian Centre for Disease Control

(NCDC) to ensure the safety of shareholders and participants at Annual General Meetings/

Extra-Ordinary General Meetings and other meetings which may be held during the

prevalence of the pandemic.

The first Capital Market Committee Meeting for the year scheduled to hold on April 23,

2020, and all other meetings have been postponed indefinitely.

It is important to note that the foregoing guidelines are not exhaustive, but rather represent

an outline of immediate actions the Commission considers necessary to sustain the

actualization of its regulatory mandate and maintain the integrity of the Nigerian capital

market during this challenging period. Accordingly, the Commission will continue to issue

updates to market stakeholders as appropriate. The Commission will also continue to

closely coordinate with other financial regulators and governmental authorities.

ii. Circular to all Regulated Entities and the Market of March 31, 2020

This was issued as a follow up to the Circular of March 24, 2020. It provides for the following

salient points:

Issuers

All public companies are required to continue to make material disclosures to investors on

the impact of COVID-19 Pandemic on their business operations. They should also continue

to disclose the trend and outlook for the company, and updates on implementation of

business continuity plans. Public companies are to publish these disclosures on their

websites and on other relevant media.

Public companies who plan to conduct AGMs are required to ensure that the conduct of

the meetings comply with the provisions of the Companies and Allied Matters Act, the

Investments and Securities Act, the SEC Rules and Regulations, relevant government and

health circulars and guidelines issued in this regard.

Debt Issuers are also expected to continue to engage Trustees to ensure that relevant

disclosures are provided. Trustees are required to provide updates to the Commission

accordingly.

For further guidance, all Issuers and Trustees may contact the Commission through the

following email addresses:

Public Companies - [email protected]

Debt Issuers- [email protected], [email protected]

All public companies are required to continue to make material disclosures to investors on the impact of COVID-19 Pandemic on their business operations.


Capital Market Operators (CMOs)

All CMOs are required to continue to monitor the real and potential risks COVID-19 may

have on their business operations and the discharge of services to investors and clients.

For further guidance, the Commission may be contacted through the dedicated email

addresses for filing CMOs returns.

Commission’s Operations

In compliance with the Federal Government’s directives on the cessation of movement in Lagos, Ogun and the Federal Capital Territory, the Commission has activated its business continuity process. Consequently, staff of the Commission are working remotely. All its electronic channels remain open to provide the necessary support to capital market stakeholders.

The Commission will continue to engage and collaborate with all stakeholders to ensure that the capital market remains resilient.

An examination of the SEC Circulars discloses that they provide for the ease of filing of

reports, applications and returns and holding of Meetings for all stakeholders while ensuring

that the confidence of the public is reposed in the activities of the public companies and

SEC during the pendency of the Covid-19 pandemic. Likewise, they place a priority on

compliance with the extant laws while ensuring that there was a continuation of service

delivery. Additionally, the SEC appears to be motivated by the need to keep the public

abreast of their investment particularly with stipulations requiring companies to publish

via their websites and other media platforms to investors on the impact of COVID-19 to

their business operations and provide an outlook for the company through updates on

implementation of business continuity plans.6

3. The Nigerian Stock Exchange’s (NSE) Guidance on Companies’ Virtual Board,

Committee, and Management Meetings of April 15, 2020, (the NSE Guidance)

The NSE Guidance was published due to the importance of active participation of

stakeholders at meetings and the evolving trend in which meetings are increasingly held

via virtual means, especially in light of the outbreak of COVID-19. Thus, the rational of the

Guidance is the need to provide attendees of company meetings with the opportunity

to engage actively and clearly state the roles of integral members (Company secretary,

Chairman, and Attendees ) and the importance of collaborating with the Technical/ ICT team

of the Company in ensuring the success of BoD and Management meetings.

Although the NSE Guidance can be said to apply to only public companies, the suggestions

contained therein are relevant to private companies and as such could be utilised by

all companies. The NSE Guidance which is a part of the NSE’s Guidance and Thought

Leadership series, contains laudable suggestions which address the concerns surrounding

the hosting of virtual meetings such as fear of diminishing member’s ability to participate

effectively, the loss of attendant benefits of physical meetings such as verbal cues,7 merely

offering guidance to companies and not prescriptive. The CAC Guidelines, on the other

hand, is prescriptive as it stems from the statutory powers8of the CAC to administer the

provisions of the Companies and Allied Matters Act, and supervise and manage the affairs

of companies.

4. Statutory and Regulatory Consideration of Virtual Meetings

In consideration of the statutory and regulatory framework on holding of virtual meetings

in Nigeria, the NSE Guidance recognises that no provision within the CAMA permits the

6 SEC Nigeria, Circular To All Regulated Entities And The Market at <https://sec.gov.ng/circular-to-all-regulated-enti-ties-and-the-market/> accessed on April 17, 2020

7 NSE/REG/R&I/GTL1/CVM1/04/20

8 Section 7 (a) and (e) of the Companies and Allied Matters Act, Cap C20, LFN 2004

The NSE Guidance was published due to the importance of active participation of stakeholders at meetings and the evolving trend in which meetings are increasingly held via virtual means, especially in light of the outbreak of COVID-19.


holding of virtual meetings. This results from the absence of any consideration of virtual

meetings at the time of the drafting of CAMA by the lawmakers. CAMA was enacted

in an era where computer operations were uncommon in Nigeria. Thus, to bypass the

lacuna in the law, the NSE Guidance recommends the insertion of virtual meeting clauses

in the article of association of companies or in the Board, Committee and Management

charters that will expressly permit companies to hold virtual meetings. Amending these

documents, more specifically; Articles of Association of a Company, might prove difficult

during the subsistence of the lockdown order issued by the Federal Government. Therefore,

companies can amend their articles subsequently if they wish to utilise virtual meetings.

This interpretation of CAMA by the NSE Guidance is in accord with the maxim Qui tacet consentit (Silence gives consent). Therefore, companies being regulated by their articles

can provide the express basis or legality for carrying on virtual meetings. In Yalaju-Amaye v Associated Registered Engineering Contractors Ltd. & Ors, the Supreme Court of Nigeria

per Karibi-Whyte, J.S.C. held “The memorandum and articles of association of the 1st

Defendant/Respondent company bind the Company and the plaintiff/appellant (Director).

The document constitutes a contract between them.9 Likewise, in United Foams Products (Nig) Ltd & Ors V. Opobiyi & Anor,10 the Court of Appeal held:

The Memorandum and Articles of Association of a company, the provisions of Section 41 (1) of Companies and Allied Matters Act (CAMA) 2004 says, is a contract under seal between the Company and its members and officers and between its members and officers themselves whereby they agree to perform the provisions of the Memorandum and its Articles.” Per UGO, JCA (Pp. 55-56, Paras. E-A)

Globally, there is increasing legal support for the use of virtual meetings by companies.

In the United States of America, a plethora of states such as Texas, Michigan, New

York, California and Delaware permit the holding of virtual meetings for organisations. In

Delaware, remote participation of board meeting is possible by virtue of section 141 (i) of

the Delaware General Corporation Law (“DGCL”) and section 211 DGCL permits remote

participation of shareholders meeting (AGM). Section 211 DGCL states:

If, pursuant to this paragraph or the certificate of incorporation or the bylaws of the corporation, the Board of directors is authorised to determine the place of a meeting of stockholders, the Board of directors may, in its sole discretion, determine that the meeting shall not be held at any place, but may instead be held solely by means of remote communication as authorised by paragraph (a) (2) of this section.11

Whereas in the state of Michigan, sections 405 & 521(3) of the Michigan Business

Corporation Act12 (“BCA”) permit remote shareholders and board meetings for companies

and sections 405 & 521 (3) of the Michigan Non-profit Corporation Act (“NCA”) permits

remote shareholders meeting and board meeting for non-profit corporations. Section 521

(3) BCA states:

Unless otherwise restricted by the articles of incorporation or bylaws, a member of the Board or of a committee designated by the Board may participate in a meeting by means of conference telephone or other means of remote communication through which all persons participating in the meeting can communicate with the other participants. Participation in a meeting pursuant to this subsection constitutes presence in person at the meeting.

9 (1990) LPELR-3511(SC)

10 (2017) LPELR-43166(CA)

11 At https://www.dphu.org/uploads/attachements/books/books_3846_0.pdf

12 Act 284 of 1972 At <http://www.legislature.mi.gov/(S(maupzikrjg2e0l12itmet5uo))/mileg.aspx?page=GetObject&objectnam-e=mcl-act-284-of-1972>

Globally, there is increasing legal support for the use of virtual meetings by companies. In the United States of America, a plethora of states such as Texas, Michigan, New York, California and Delaware permit the holding of virtual meetings for organisations.


Similarly, section 360A of the UK Companies’ Act 2006,13 expressly states that electronic

meetings (management and shareholder meetings) are not precluded as a form of meeting.

The section states as follows:

Nothing in this Part is to be taken to preclude the holding and conducting of a meeting in such a way that persons who are not present together at the same place may by electronic means attend and speak and vote at it.

Under the Companies and Allied Matters Act, section 216 thereof, all statutory and annual

general meetings are mandated to be held in Nigeria. The section uses the word shall and

the venue is attributable to a physical place. Section 218(1) provides that the Notice of a

meeting shall specify the place, date and time of meeting. All these express provisions

of the CAMA point to the fact that the CAMA envisages that meetings would be held

physically. Therefore, the absence of an express direction under the CAC Guidelines as to

whether the meetings are to be by virtual means or by physical attendance can only be

construed to mean that the AGM’s are to be held physically. This argument is supported

by the wordings of the guidelines such as requirement for the appointment of a limited

number of proxies, and the attendance of a CAC representative at the meeting. In view

of the COVID-19 Regulation issued by the President on March 30, 2020, pursuant to

Quarantine Act14 and the extension of the lock down order to discourage social gatherings,

one wonders if holding of companies’ meetings, physically, at this time will not be against

public policy and national safety.

A company that is unable to hold its AGM (not first AGM) in line with the provisions of CAMA

in view of the on-going pandemic can in line with section 213 (1)(b) seek an extension from

the Corporate Affairs Commission, and the CAC can under the law grant an extension by

a period not exceeding three months, where it is impracticable to make provisions in the

articles for virtual meetings.

Issuance of Notices

Section 218 (3) of the CAMA provides for the issuance of Notices to all members entitled

to attend the meeting. Thus, the CAC Guidelines prescribe that the evidence of postage or

delivery of such notices should be furnished to the CAC after the AGM.

However, the NSE Guidance does not expressly make any directive on notices of virtual

meetings but it does stipulate the responsibilities of participants, specifically that of the

Company Secretary to ensure that pre-meeting preparations are concluded well ahead of

the meeting and in line with the extant law. Pre-meeting preparations would reasonably

and naturally include the preparation and circulation of notices to attendees of the meeting.

Quorum of Meeting

The CAC Guidelines on the determination of the quorum at the AGM stipulate that quorum

shall be established as provided by a company’s articles or Section 232 of the CAMA which

provides:

“Unless otherwise provided in the articles, the quorum for the meeting of a company shall be one-third of the total number of members of the company or twenty-five members (whichever is less) present in person or by proxy…”

For there to be a quorum for any meeting whether virtual or physical under the CAC

Guideline, there will need to be a total number of proxies that number up to one-third of

the members of Company or a total of twenty-five proxies (whichever is less) when quorum

is not stipulated by the articles. Therefore, an AGM physically held for a large company

that requires the minimum of 25 persons or more pursuant to the CAC Guidelines has the

13 2006 c 46 at <http://www.legislation.gov.uk/ukpga/2006/46/section/360A>

14 CAP Q2 Laws of the Federation of Nigeria 2004

The NSE Guidance was published due to the importance of active participation of stakeholders at meetings and the evolving trend in which meetings are increasingly held via virtual means, especially in light of the outbreak of COVID-19.


potential to conflict with the Federal Government’s Regulation on social distancing, except

for a situation where few proxies represent the interest of all the members. No doubt, the

issue of fair representation may arise.

Roles of Officers of Companies in Virtual Meetings

Company Secretary

Although CAMA does not provide for virtual meetings, as the COVID-19 or any similar

situation was not envisaged by the lawmakers at the time of its enactment. The successful

planning and execution of virtual Board of Directors or Annual General Meetings is to a

large extent dependent on the Company Secretary’s managerial and administrative skills

deployed towards the discharge of his obligations to the Company.

It behoves on the Company Secretary to be proactive and work in synergy with the

Chairman of the Board and the technical support team/ ICT department of the Company

to ensure that attendees (Directors and Shareholders) are adequately prepared for the

meeting, as well as communication (verbal and documentary) are seamlessly shared

during the meeting.

The Company Secretary has the statutory duty15, to attend meetings of the Company, as

well as ensure that the meetings are conducted in compliance with the applicable laws and

regulations. In addition, principle 8.6.4 of the Nigerian Code of Corporate Governance 2018

(NCCG) provides that the Company Secretary is expected to “notify Board members of upcoming meetings of the Board and its committees as well as other matters that warrant their attention”. It is arguable that in light of this pandemic and prevailing realities, other

matters that warrant their attention would include the details of any virtual meeting and

the preferred teleconferencing, web-conferencing, or video conferencing tools proposed

to be utilised.

It is imperative that the Company Secretary ensures that pre-meeting preparations are

concluded well ahead of the meeting. This would include:

a. Ensure that the attendees are conversant and comfortable with the use of the

selected virtual tool;

b. Liaise with the Management in the preparation of Policies, Guidelines or Standard

Operating Procedures16 on Virtual Meeting, which will aid in ensuring maximum

participation and productivity at meetings.

c. Compile and circulate Board papers and the Guidelines on virtual meetings to the

Directors in a timely manner to afford them sufficient time to read the materials which

aid in their preparedness for the meeting17.

d. Ensuring that the technical / ICT staff are available for the duration of the meeting to

solve any technical issues or disruptions that may occur in the course of the meeting

e. Synergise with the technical/ ICT personnel to ensure that all data protection policies

and safeguards are in place to protect confidentiality of information shared during the

meeting.

f. Collaborate with the technical/ ICT staff to ensure that the virtual tools works

effectively and would adequately serve the required purpose.

In devising creative means of conducting virtual meetings of Directors or Shareholders, it

is imperative that the Company Secretary ensures that no unauthorised persons or third-

15 Company and Allied Matters Act, Cap C20 LFN 2004; section 298(1)(a)

16 This Policy, Guideline or Standard Operating Procedure would regulate matters such as Attendance, Conduct during virtual meetings, designated workspace for virtual meetings, Dress Code and Appearance, mode of indication of interest make contributions or ask questions,

17 Nigerian Code of Corporate Governance 2018; Principle 8.6.5

Although CAMA does not provide for virtual meetings, as the COVID-19 or any similar situation was not envisaged by the lawmakers at the time of its enactment.


party18 is granted access to the meeting. This is to prevent data breach, thereby protecting

the confidentiality of the information shared during the meetings and trade secrets of the

Company.

During the meeting, the Company Secretary is expected to:

a. Provide guidance to the Board and individual Directors, or Shareholders as to how their

responsibilities should be properly discharged;

b. Ensure that the meeting complies with the applicable laws and regulations19;

c. Ensure that the Policy or Standard Operation Procedure (SOP) on Virtual Meetings

and the Agenda are adhered to as this would create a form of orderliness during the

meeting;

d. Ensure that the documents being reviewed are projected on the shared screen to

enable the attendees follow the discussions, make contributions, ask questions and

seek for clarification with ease;

e. Ensure that any technical request, concerns or disruptions are promptly resolved by the

technical/ ICT staff;

f. Alert the Chairman when a Director or Shareholder has indicated interest to speak;

g. Clearly and properly record the Board’s discussion and decisions reached at the

meeting20; and

h. Render all necessary secretarial services in respect of the meeting21.

Chairman

The Chairman is responsible for providing overall leadership of the Company and the Board.

He is also responsible for ensuring the active participation of all Directors at the meeting.22

Most importantly, the Chairman is to ensure that the virtual attendees adhere to the policies

on Virtual Meetings23 and the Agenda of the meeting to ensure seamless conduct of the

meeting. In addition, whilst presiding over meetings24, the Chairman has the following

duties25amongst others;

a. Establish main goals and objectives26;

b. ensure that proceedings are conducted in a smooth and orderly manner27;

c. Create rules of engagement, that is, regarding muting and choice of audio or video

meeting28;

d. ensure that all questions that arise are promptly decided29;

e. Reconfirm attendees are present/ connected upon resumption after each break

sessions or reconnection upon disruption30.

18 Persons not contained in section 219 and 266 of the Company and Allied Matters Act, Cap C20 LFN 2004, as being entitled to receive Notice of Meeting for the Annual General Meetings or Board of Directors Meeting respectively.

19 This Policy, Guideline or Standard Operating Procedure would regulate matters such as Attendance, Conduct during virtual meetings, designated workspace for virtual meetings, Dress Code and Appearance, mode of indication of interest make contributions or ask questions


21 This Policy, Guideline or Standard Operating Procedure would regulate matters such as Attendance, Conduct during virtual meetings, designated workspace for virtual meetings, Dress Code and Appearance, mode of indication of interest make contributions or ask questions

22 Nigerian Code of Corporate Governance 2018; Principle 3


24 Companies and Allied Matters Act, Cap C20 LFN 2004, section 240(1), Nigerian Code of Corporate Governance 2018; Principle 3.4.1

25 Companies and Allied Matters Act, Cap C20 LFN 2004, section 240(3)

26 NSE Guidance on Companies’ Virtual Board, Committee, and Management Meeting; section 4.4 (a)

27 Companies and Allied Matters Act, Cap C20 LFN 2004, section 240(3)(b); Nigerian Code of Corporate Governance 2018; Principle 3.4.5

28 NSE Guidance on Companies’ Virtual Board, Committee, and Management Meeting; section 4.4 (b)

29 Companies and Allied Matters Act, Cap C20 LFN 2004, section 240(3)(d)

30 NSE Guidance on Companies’ Virtual Board, Committee, and Management Meeting; section 4.4 (k)

Most importantly, the Chairman is to ensure that the virtual attendees adhere to the policies on Virtual Meetings and the Agenda of the meeting to ensure seamless conduct of the meeting.


f. Ensure that the true intention of the meeting is carried out in resolving any issue that

arises before it31 and

g. Above all, act in the best interest of the Company32.

Attendees

It is not in doubt that technology plays a pivotal role in the seamless conduct of virtual

meetings. The attendees to every meeting are expected to adhere to the Guidelines, Policies

or Standard Operating Procedures on Virtual Meetings as circulated by the Company. It is,

however, important to note that there is a need for attendees to pay particular attention to

dressing and comportment during a virtual meeting in order to ensure the smooth operation

of the meeting and avoid disruptions.33

Where other clarifications, concerns or questions arise, the Company Secretary should be

the first point of call. It is the duty of the Company Secretary to …ensure good information flows within the Board and its committees...34, thus essentially making the Company

secretary the central information center of the Company. The attendees promptly confirm

their attendance of the meeting and should not hesitate to request information (legal or

technical) to facilitate their attendance and participation at the meeting from the Company

Secretary.

Therefore, for the effective conduct of a virtual meeting, there has to exist a synergy

between the Company Secretary and the Technical Team, a synergy between the Chairman

and the Company Secretary and most importantly, synergy amongst all attendees of the

meeting.

Conclusion and Recommendations

Although well-intentioned, the CAC Guidelines on the holding of companies’ meetings

raise salient questions and issues of law that need to be considered and addressed

by stakeholders before holding their meetings. Important questions such as whether

a meeting can be held virtually, physically or by a hybrid form, and whether the use of

restricted number of proxies would not be infringing on the rights of a member of the

company to appoint a proxy of his own choice.

An easy way out of this uncertainty is for companies to seek extension of time within which

to hold their general meetings with the hope that the COVID-19 pandemic would end soon,

and or going forward, ensure that their articles specifically make provisons for holding of

virtual or hybrid meetings.

It also appears that the signing of the Bill amending the Companies and Allied Matters Act

which was passed by the Senate sometime in 2018, and has provisions already amended to

align with current realities, has become long overdue. it is necessary for the law makers to

revisit very important legislations such as the CAMA with a view to updating them to make

them relevant to our ever dynamic world.

31 Companies and Allied Matters Act, Cap C20 LFN 2004, section 240(3)(c)

32 Companies and Allied Matters Act, Cap C20 LFN 2004, section 240(3)(e)

33 NSE Guidance on Companies’ Virtual Board, Committee, and Management Meeting; section 5.1 and 5.2

34 Nigerian Code of Corporate Governance 2018; Principle 8.7

Therefore, for the effective conduct of a virtual meeting, there has to exist a synergy between the Company Secretary and the Technical Team, a synergy between the Chairman and the Company Secretary and most importantly, synergy amongst all attendees of the meeting.


Adeola AdeniyiCoporate Unit

Coporate Unit

Coporate Unit

Coporate Unit

Eunice Alasa

Monsuratu Kadiri

Ibrahim Muhammed

Authors

Lagos8, Ogunyemi RoadPalace Way, OniruVictoria IslandLagos, Nigeria

Enugu23, Umuawulu StreetIndependence LayoutEnugu, Nigeria

+234 811 395 1052, +234 811 395 1053 Kennapartners

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