Trend observations from 120 general meetings
About 120 general meetings have now been held via Konsento, and around a third of these decisions were passed which were remotely notarized online by a notary. Based on these experiences, we have compiled observations, which we present in a three-part blog series. In doing so, we shed light on trends that influence the success of the public limited company in some cases beyond the general meeting. Each blog is dedicated to a specific topic group and offers valuable insights and tips for planning and holding general meetings.
In this blog, we show that there are both boards of directors who want to organize their general meetings independently and those who delegate or outsource as many associated tasks as possible. We will also examine which GV type is best suited under which conditions.
Autonomy through sophisticated software
A notable trend in general meetings is a growing need for boards of directors to organize and conduct general meetings independently. It is obvious that an experienced board of directors has the competence to organise a standard general meeting or a standard board meeting independently. However, younger board members also appreciate being able to convene a general meeting without the support of external experts. The same applies to applications that are not on the agenda every year, such as the introduction of a capital band or a transfer of registered office. Many general meetings held via Konsento take place without direct support from external specialists. This shows that the application enables even inexperienced boards of directors to hold a general meeting independently. Konsento offers sophisticated software, guided processes, and embedded legal know-how to support this autonomy.
Expert support
At the same time, there are still companies that are of the necessary size and want to delegate or outsource numerous tasks in connection with the general meeting. Konsento offers various services to meet this need. This includes preparing a commercial register application, appointing a notary and quality control before sending the invitation. In addition, relevant functions such as independent proxy or secretary can be booked directly with or through Konsento.
Distribution and suitability of the various GM types
The distribution of the general meetings held by consensus so far in 2024 shows a clear picture of current trends and preferences. Virtual general meetings account for 50% of all general meetings held by consensus. Hybrid general meetings follow at 37%, while physical general meetings make up just 13%. The distribution of GV forms is certainly due, on the one hand, to Konsento's customer structure, which consists for the most part of growth companies, unlisted SME companies and crowd-financed AGs and only to a lesser extent of listed SMEs. Nevertheless, it is becoming apparent which GV type is particularly suitable in which situation, which has led in particular to the high number of virtual general meetings via consensus. However, we can immediately anticipate that none of the AGM types is particularly suitable or unsuitable due to the age structure of the shareholders. Our observations show that public limited companies hold virtual general meetings with the more typical investors “at the best age” with the same high participation rate as joint stock companies with younger shareholders.
Virtual general meetings
Virtual general meetings are particularly suitable for extraordinary general meetings, for example to increase share capital or for other amendments to the articles of association. This is especially true when the notary can participate online and complete the notarization remotely, saving costs. At such general meetings, the focus is on meeting the legal requirements for implementing corporate transformation and development, not the presentation of the company or the commitment of shareholders to the company. The fact that 50% of general meetings on Konsento are held virtually is due to the fact that Konsento specializes in standardizing digital capital increases.
Virtual general meetings are also particularly suitable for a geographically diversified shareholder or team, particularly on the Board of Directors. They also offer the opportunity for “working nomads” to attend the general meeting and help avoid travel activities. Seen in this light, they contribute to the implementation of the public company's ESG strategy. They are also very suitable for saving space and logistics costs.
Hybrid general meetings
Hybrid general meetings generally offer the same benefits as virtual general meetings, but also create the opportunity for shareholders from the region to attend in person and exchange ideas with the board of directors after the general meeting. Conversely, they include all the benefits of the physical general meeting, but at the same time also enable geographically distant shareholders to actively participate in real time. This enables shareholders who are not from the region to participate without much effort. Shareholders reward this with regularly high participation rates.
In addition, hybrid general meetings are of course a good option for joint stock companies that want to enable their shareholders to participate online but (still) do not yet have the statutory basis for virtual meetings.
Physical general meetings with place of meeting
Physical general meetings are particularly suitable if the board of directors wants to get in personal contact with individual shareholders after the general meeting or would like to offer shareholders this opportunity.
They are also suitable for joint stock companies that have not yet included the option of virtual general meetings in their statutes, but are currently still afraid of the challenges of a hybrid meeting using analog and electronic communication channels.
Review and context
The previous blogs in this series covered the General Assembly as a marketing platform and the growing need for data analysis. This blog has highlighted the balance between autonomy and delegation of preparatory work for general meetings. Together, these three blogs provide a comprehensive overview of current trends and best practices at general meetings.
We are happy to provide our innovative GV tool during a non-binding demo appointment closer ahead.
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