This archive report was first published on 19 May 2020.
On May 19, 2020, the High Court of Kenya made a landmark decision allowing companies to hold virtual meetings, a move that has been hailed as a necessary response to the COVID-19 pandemic.
According to Section 280 of the Companies Act, 2015, the High Court has the power to make an order requiring a meeting to be convened, held, and conducted in any manner it considers appropriate. In this case, the court deemed that virtual meetings were the most appropriate way to hold meetings during the pandemic.
With the pandemic making it difficult for shareholders to attend physical meetings, companies have been able to hold virtual shareholder meetings, allowing shareholders to exercise their voting rights online or through video-conference.
However, companies must exercise caution to avoid court cases from shareholders, who may target the conduct and manner of the meeting as well as the resolutions passed. To avoid this, companies can guarantee that shareholders can exercise their voting rights online, provide equal rights and privileges to participate, publish company resolutions and notices on time, and provide a full live transmission of the meeting.
As the pandemic continues, it is clear that virtual meetings are the way forward for companies in Kenya. In fact, companies should consider modernizing their articles of association to allow for the possibility of convening and holding virtual shareholder meetings.
