Banking giant RBS is gearing up to hold a dramatically scaled-back physical annual general meeting (AGM) due to the coronavirus pandemic, with just core attendees present in person.
RBS, like all listed companies with a financial year ending in December, has a legal obligation to hold a physical AGM by 30 June, with the meeting currently scheduled for 29 April at its Edinburgh headquarters.
However the lender is exploring holding the meeting with just core attendees from RBS present and investors watching online as the Covid-19 spreads, City A.M. understands.
“If [the AGM] goes ahead we expect it to be an empty room with core attendees, and shareholders watching online,” an RBS source said.
The bank has yet to make any final decisions on when and how the AGM will take place, and whether the meeting goes ahead as planned in April will depend on government advice.
The UK government this evening has not banned public gatherings, however Scottish First Minister Nicola Sturgeon said earlier this afternoon she would recommend cancelling gatherings of more than 500 people in Scotland, where RBS is headquartered.
RBS has introduced restrictions on staff travel in the wake of the coronavirus outbreak. Any employee travel between cities has to be signed off by a senior staff member.
Although RBS is headquartered in Edinburgh, many of the bank’s staff, including chief executive Alison Rose, are based in London.
Banks across the world are rushing to prepare themselves for a worsening outbreak of Covid-19, with many ordering staff to work from home and testing out contingency plans and back up facilities in case the virus spreads further.
Meanwhile many listed companies in the UK are facing disruption to their AGMs if the government introduces more stringent restrictions in a bid to slow the spread of the virus.
HSBC yesterday became the first British company to warn investors about the outbreak’s possible impact on its AGM, encouraging shareholders to submit proxy votes ahead of the meeting even if they plan to attend in person.
Over 40 per cent of FTSE 100 companies’ annual meetings are scheduled to take place in April or May, according to data from law firm Linklaters.
“AGMs will normally be able to go ahead, even if many shareholders choose (or are forced) to stay away, as the quorum requirement for the AGM to be legally binding is very low for most UK companies,” said Linklaters partner Lucy Fergusson.
“Traditionally most investors prefer to be physically present so they can hear directly from and question company executives,” she added.
“However, 2020 could see much smaller gatherings and companies may want to consider other ways of communicating with shareholders.”