March and April are the months during which companies generally hold their annual general meeting of shareholders (GMS) having on the agenda the approval of the financial statements, of the budget and of the business plan. The annual GMS is particularly important as it gives the opportunity for shareholders to meet and discuss directly with the management and the other shareholders on the past and future activity of the company.

The calling and holding of GMS is strictly regulated for joint stock companies, in particular for companies listed on the stock exchange (either on the main market or on the AeRO market). Most of these companies have already called the GMS or are in the process of calling the GMS.

However, due to the ongoing outbreak of coronavirus, companies should reconsider their arrangements for the GMS as they must comply with public health measures, including the ban on large gatherings, travel restrictions, unavailability of venues as well as with potential practical disruptions, such as communication disorders. In this context, companies will need to avoid personal interaction as much as possible and ensure that relevant alternatives are in place to ensure proper calling and holding of GMS.

While companies which are not listed may take decisions of GMS by correspondence only (if specifically permitted in the articles of incorporation), listed companies have several challenges to face as they cannot take decisions by correspondence only.

Listed companies may use remote means of communications in holding the GMS, but virtual meetings (audio only or audio-video) have been rarely used in practice due to costs and technical complexities (normally, a 3^rdparty platform provider is required to ensure the technical capability and adequate cybersecurity and protection of information in the context of simultaneous participation of a large number of shareholders).Based on the current legislation, in view of addressing public health concerns, comply with the measures imposed by the authorities, but, in the same time, observe the rights of the shareholders, companies may consider the following principles and guidelines when organizing the GMS:

• Organize the physical GMS in a place and in accordance with the restrictions and instructions from the public authorities (preferably, at company’s headquarters);
  
  
• Prepare, communicate and apply a clear procedure for participation and voting in the GMS, with detailed rules of conduct;
  
  
• Strongly encourage shareholders to vote by correspondence or to appoint a common proxy (e.g., a broker) to attend and vote on their behalf
  
  

Note: Major companies have already encouraged shareholders to vote by correspondence, in light of the COVID-19 context

• Welcome shareholders to submit questions in advance
  
  
• Organize, if possible, hybrid meetings (physical and by electronic means)
  
  
• In the physical meeting, observe the measures imposed by the authorities to minimize the spread of COVID-19, such as number of participants and space distance between participants (e.g. organizing two rooms which can be linked through communication channels), limitation of the time allocated to the meeting; voting by raise of hands could be used instead of voting cards
  
  
• If possible, broadcast the physical meeting so that the shareholders be able to see and hear the discussions from distance
  
  
• Respond to all questions from the shareholders, before or during the meeting (and, if not possible due to a high volume of questions), as soon as possible after the meeting
  
  
• Keep shareholders informed on any developments in the organization of the GMS
  
  

Potential temporary legal measures regarding organization and holding of GMS

In consideration of the risk of spread of COVID-19, there are proposals and discussions in the business community with respect to approval by the Romanian Government of certain temporary measures regarding the organization and holding of general meetings of shareholders of joint stock companies (including listed companies).

In brief, the measures, if they will be approved, are aimed to:

• allow the GMS to take place by remote means exclusively (by correspondence and/or by electronic means), based on the decision of the directors
  
  
• lift the requirement to publish the call notice with the Official Gazette and in a newspaper
  
  
• entitle directors to amend the call notice after the convocation, in exceptional situations triggered by COVID-19, for example to change the date or the arrangements of the GMS or to revoke the GMS;
  
  
• amend the manner in which supporting documents and information for the GMS (voting ballot, template power of attorney, draft GMS resolution, informative materials) are made available to the shareholders
  
  

Note: We will continue to monitor the status and will revert with updates in this respect.