The government on Friday notified norms allowing companies to hold general meetings via videoconferencing in a “green” initiative aimed at ensuring wider participation in shareholder meetings and speedier decision-making.
The ministry of corporate affairs in a notification said that shareholders can attend board meetings through the electronic mode and video conferencing. “They will be required to be physically present for only one meeting in a year,” a senior official at the ministry of corporate affairs told Hindustan Times .
The chairman of the meeting and secretary should, however, ensure that integrity is safeguarded in cases of video conferencing.
The ministry has been receiving representations from various industry bodies to recognise participation by shareholders in meetings under the Companies Act 1956.
“To provide larger participation and for curbing the cost borne by the shareholders to attend general meetings, listed companies may provide video conferencing connectivity at least five places in India,” the official said.
These places should be situated all over India in such a way that it covers top five states or union territories based on maximum number of members or at least 1000 members residing as per the address registered with the depositors.
The new Companies Bill has provisions for allowing videoconferencing. The government is now trying to speed up the process of rolling it out through a set of rules. Though several companies even now get their directors to participate in board meetings through the videoconferencing route, they are not formally included nor are they counted in the quorum.
“The notice of the meeting must inform shareholders regarding availability of participation through video conferencing and provide necessary information to shareholders to access the available facility of videoconferencing,” the official said.
The move is intended to allow flexibility to shareholders while cut down on costs.