Concerns Over COVID-19 Response Ahead of Regular General Meeting... 'Guidelines' Established

Separate Space Needed for Suspected COVID-19 Cases... Banquet or Sokhoe System Can Be Used

[Asia Economy Reporter Kum Boryeong] "We sincerely hope that nothing happens at this regular shareholders' meeting due to the novel coronavirus infection (COVID-19)."

As COVID-19 cases and deaths surge, listed companies preparing for the March regular shareholders' meetings are on high alert. The already busy shareholders' meeting season is compounded by the unprecedented COVID-19 situation, leaving companies increasingly worried about how to respond.

To assist listed companies in this predicament, a 'guideline' has been prepared. The Korea Listed Companies Association and the KOSDAQ Association, with support from the Financial Services Commission and the Ministry of Justice, distributed the 'Response Guidelines for Safe Holding of Regular Shareholders' Meetings' to listed companies on the 5th.

One key point is that "a separate space must be prepared at the shareholders' meeting for shareholders who exhibit fever or appear to be suspected of having COVID-19." Preventing a specific shareholder from entering the meeting venue due to personal illness suspicion could be considered a restriction on exercising voting rights and may be treated as a procedural defect in the shareholders' meeting. In such cases, a separate space equipped with video devices to monitor the meeting proceedings should be prepared and guided accordingly.

Holding the shareholders' meeting in a narrow space such as an in-house conference room just because it is difficult to secure a venue should be avoided. Although there is no provision under the Commercial Act, if the meeting is held at a location where all shareholders wishing to attend cannot do so, there may be legal disputes regarding the validity of the resolution later.

If workplace closure or venue change occurs after the announcement of the shareholders' meeting location, the change must be notified through a board resolution and a corrected announcement. If such an event happens just before the meeting, the new location should be announced on-site with signboards and postings, and sufficient time for relocation should be guaranteed. For distant locations, providing transportation can also be considered.

Additionally, it is recommended to prepare dedicated routes for external visitors to the shareholders' meeting venue (such as separate entrances, dedicated elevators, and exclusive restrooms).

However, for small and medium-sized listed companies, managing all these details accumulates work fatigue. A KOSDAQ company official said, "At least with the guidelines, preparation has become somewhat easier, but imagining preparing everything is exhausting," adding, "We need to first check if it is possible to set up monitors, speakers, and microphones in a separate space for suspected COVID-19 cases." Another KOSDAQ company official expressed difficulty, saying, "Even if the meeting venue changes, we don't know how many shareholders will come, so providing transportation individually is impossible, and if the venue is not our own building but another company's, creating dedicated routes is difficult."

Meanwhile, if it is judged that the shareholders' meeting cannot proceed smoothly after it has started, the adjournment or continuation system can be used. This applies to situations such as delays in financial statement approval due to workplace closures. Even in such cases, the adjourned or continued meeting must be held within a reasonable period that can be recognized as identical to the original shareholders' meeting.

This content was produced with the assistance of AI translation services.