Question

How will corporate governance obligations change due to the virus? For example, what might potential investors want to know about a companies response to stress in this current climate?

Answer 1

Due to the COvid-19 pandemic, companies are finding it difficult to have management meetings, annual general meeings or the other board discussions in person. All of them have to be delayed further or they are being done vitually while maintaining social distancing. This is posing some challenge to the corporate governance structure of the company. If a company changes from a physical to a virtual meeting, it must properly notify its shareholders of the change. In March, the SEC issued coronavirus-related guidance to issuers. The guidance would, for purposes of the federal securities laws, allow affected parties to announce in SEC filings changes in the meeting date or location or the use of virtual meetings. Issuers would not have to incur the cost of additional physical mailing of proxy materials to publicize the changes.

From the investors' perspective, it is important that the company is virtually updating all the shareholders by email or by putting public notice of the notices on EMMA if they have bond redemption or any fiancials to be updated. Investors should also be provided with Minutes of meeting conducted virtually so that the proper governance model is followed keeping shareholders in loo while making further decisions.