During the COVID-19 pandemic, public listed companies (PLCs) were given the flexibility to conduct fully virtual general meetings to comply with social distancing measures. This approach ensured the continuity of shareholder engagement during unprecedented times. However, even after the pandemic subsided, more than 50% of PLCs continued to hold their annual general meetings (AGMs) entirely online in the first half of 2024.

Recognizing the importance of in-person engagement, the Securities Commission Malaysia (SC) and Bursa Malaysia have now mandated a return to hybrid or physical meeting formats, signalling a shift back to more traditional and inclusive shareholder meetings. This principle of fostering direct interaction and engagement is also highly relevant for non-listed companies, SMEs, and small businesses, which can benefit from adopting similar practices to enhance stakeholder communication and trust.

What does this mean for PLCs —and Why Private Companies Should Take Notice?

  1. Enhanced Shareholder Engagement: Hybrid and physical meetings allow shareholders to engage more personally with the board, which often leads to more honest conversations and deeper accountability. For PLCs, this is a move back toward corporate transparency, but SMEs and private companies should also see the value in fostering direct relationships with their stakeholders. Virtual-only formats can feel distant and transactional; blending physical and virtual can offer a balance that benefits all.
  2. Greater Flexibility and Inclusivity: Hybrid models allow shareholders who can’t attend in person—especially those overseas or with time constraints—to still participate. This flexibility isn’t just for PLCs. SMEs with investors or partners abroad can use the same format to make meetings more inclusive, broadening their reach while maintaining the personal touch of in-person attendance.
  3. Strengthening Governance Practices: The push for hybrid meetings reflects a broader trend toward stronger governance. PLCs must ensure transparency, but private businesses and SMEs also benefit from adopting governance practices that demonstrate accountability to investors, partners, and customers alike. The more inclusive the forum, the more trust is built.
  4. Logistical and Financial Consideration: While hybrid meetings can introduce logistical and financial challenges, like managing both virtual and in-person setups, the payoff in deeper engagement often outweighs the costs. Smaller companies may balk at the initial investment, but for those eyeing growth, creating an inclusive, accountable forum for stakeholders could be a strategic advantage.

Preparing for the Transition

The transition to hybrid or physical general meetings represents a significant change in how PLCs engage with their shareholders. While it presents challenges in terms of logistics and costs, it also opens up opportunities for deeper engagement and improved governance. PLCs should begin preparing by evaluating their current meeting formats, considering the needs of their shareholders, and ensuring that they have the necessary resources in place to support hybrid or physical meetings. This shift will require careful planning, but with the right approach, it can lead to more robust shareholder relations and stronger corporate governance.

However, the underlying principles also extends beyond listed companies. SMEs and private businesses should take note: building stronger connections with stakeholders, ensuring transparency, and fostering inclusion are key to long-term success, no matter the size of the company.

Looking Ahead: Regulatory Compliance

Bursa Malaysia will soon release additional guidance on these new requirements. As these updates unfold, we’ll monitor the situation closely and provide the latest information to help PLCs, SMEs, and businesses alike navigate the evolving landscape. Whether you’re complying with regulations or voluntarily enhancing shareholder engagement, this shift presents an opportunity for all businesses to strengthen governance and foster better relationships in a post-pandemic world.

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This article was written by Toh Jia Yi (Associate) from Donovan & Ho’s corporate and commercial practice group.

Our corporate practice group advises on corporate acquisitions, restructuring exercises, joint venture arrangements, shareholder agreements, employee share options and franchise businesses, Malaysia start-up founders and can assist with venture capital funds in Seed, Series A & B funding rounds.  Feel free to contact us if you have any queries.

 

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