The federal cabinet has passed the draft law to introduce virtual general meetings. What do you think of it?
The corona pandemic has shown how important it is for companies to be able to hold general meetings virtually in times of crisis. However, the draft law does not reflect the special technical and organizational requirements of a virtual general meeting and therefore falls short.
Virtual general meetings
“The draft law passed by the federal government falls far short of the coalition’s self-imposed goal of modernizing the general meeting. It leads to considerable legal uncertainty when holding virtual general meetings. For example, there is a risk that due to an excessive number of requests to speak sent electronically at the same time, it will no longer be possible to guarantee that the Annual General Meeting will proceed properly. Therefore, in the interests of the shareholders and their companies, the draft urgently needs to be improved in the parliamentary process,” demands Christine Bortenlänger, Executive Director of Deutsches Aktieninstitut.
The virtual general meeting offers institutional and private investors alike a significantly simplified opportunity to participate. The number of private investors who follow the general meetings and can vote for themselves has increased significantly in many companies in recent years.
“The aim is for companies to be able to choose between a physical general meeting and a virtual general meeting on the basis of a resolution by the shareholders,” says Bortenlänger. “But this also requires legal certainty when holding a virtual general meeting. There are specific risks here that the draft law does not sufficiently address.”
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