Boosted by COVID, Japan wants fully online shareholder meetings
TOKYO – The Japanese government is looking to change the law to allow corporate shareholders’ meetings to be held entirely online, as the coronavirus pandemic has prompted many companies to mix limited online gatherings with actual physical meetings.
Japan’s company law, which requires companies to post a meeting notice with a specific “location”, currently does not recognize “online” as a location. Shareholders’ meetings are therefore not allowed to be held entirely in cyberspace, while a number of participants must physically assemble to vote and for other purposes. But business leaders have called for these demands to be lifted.
The legal review is expected to make it easier for businesses to adapt to the growing infection risks posed by the spread of COVID-19.
Adding a special measure to the current law is under consideration and officials will discuss the matter on Thursday afternoon at a meeting of the Growth Strategy Council, a government panel, to be held in cabinet. of the Prime Minister.
The government is ready to develop a concrete direction for the amendment by the end of the year, as it seeks to lift the ban by 2021, when the pandemic has yet to be quelled.
The government is considering amending the laws relating to the Companies Act as the amendment is expected to take some time due to the necessary discussions taking place in a legislative council. It is planned to create a special measure to exempt enterprises from the “location” provision of the Companies Act under certain conditions.
The specific conditions set for the special measure should be discussed by the end of the year.
Under current law, some participants can join a meeting through a video conferencing system. Some of this year’s shareholder meetings have been organized with a combination of virtual and physical aspects to prevent the spread of infections.
According to a survey by the Federation of Economic Organizations, or Keidanren, nearly 30% of companies held such joint shareholder meetings in June.
Some companies adopted a format in which general meetings were broadcast live, while others allowed voting. Shareholders were able to watch the video live once their logins and passwords were confirmed. Voting rights were exercised in writing or online.