Most higher education providers are required to hold regular meetings of key decision-making bodies. For a university, such bodies might include the university senate or similar body. For private higher education providers structured as companies, a general meeting of members will usually be required. These meetings can involve large numbers of people who do not otherwise have regular contact with one another. They are generally organised on the expectation that people wishing to attend will do so in person. As the government has imposed more restrictions on public gatherings in recent weeks, the logistics of arranging these meetings have become increasingly complicated.

This note provides an overview of some factors that organisers should consider when planning meetings in the current climate. It looks at how these considerations pertain to companies incorporated under the Corporations Act 2001 (Cth) (Corporations Act). Due to the statutory deadline for holding annual general meetings to which they are subject, the recent ‘social distancing’ restrictions may have a particular impact on public companies. The Australian Securities and Investments Commission (ASIC) addressed this issue in its 20 March 2020 media release, entitled ‘20-068MR Guidelines for meeting upcoming AGM and financial reporting requirements’ (ASIC Guidance), which this note will discuss further.

While the ASIC Guidance may not apply directly to universities, it does apply to private higher education providers incorporated under the Corporations Act, and provides useful guidance for the whole sector. Universities should consider this guidance as it relates to their own establishing Acts, any statutes made pursuant to a power under those Acts, and their own governance frameworks. The ASIC Guidance only reflects ASIC's position and is not binding on a court or other third parties that may have an interest in the way in which a meeting is held.

Modes of meeting

When in-person meetings are not feasible, virtual and hybrid meetings present potential alternatives.

A virtual meeting is conducted wholly online; the meeting is not held at any one ‘place’. In Australia, the prevailing view is that companies cannot hold virtual meetings. This is because section 249L of the Corporations Act requires that a notice of meeting for members sets out, among other things, the ‘place’ for the meeting. This requires a physical location. The ASIC Guidance acknowledges this consideration, stating that “[t]here is some doubt [as to] whether the Corporations Act permits virtual AGMs and there may also be doubt as to the validity of resolutions passed at a virtual AGM”. The ASIC Guidance goes on to suggest that it is unlikely that ASIC would take action against companies that did hold virtual meetings so long as attendees still had a reasonable opportunity to participate. Where higher education providers not subject to the Corporations Act are considering holding virtual meetings, we encourage them to carefully consider the applicable law and any relevant provisions of their constituent documents.

A hybrid meeting is conducted at one or more physical locations, and gives shareholders the ability to participate and vote electronically. In Australia, it is generally agreed that companies can hold hybrid meetings, as section 249S of the Corporations Act allows companies to hold general meetings at two or more venues, using any technology that gives all members a reasonable opportunity to participate. This view is consistent with the ASIC Guidance, which states that “hybrid AGMs are permitted under the Corporations Act”. Again, any higher education providers considering holding hybrid meetings should carefully consider the laws that apply to them and the relevant provisions of their constituent documents.

Reasonable opportunity to participate

If higher education providers hold virtual or hybrid meetings, they will generally need to ensure attendees have a reasonable opportunity to participate. What this might look like in any particular situation will ultimately depend on the circumstances of the meeting. However, as a general rule, a ‘reasonable opportunity to participate’ means that each meeting attendee (whether they are attending in person or electronically) can communicate with the chairperson, hear and be heard by other attendees (whether electronically or otherwise) and vote on a poll. Whether meeting facilitators can achieve this depends on the technology they use. 

Other considerations

If higher education providers cannot hold traditional physical meetings and need to consider organising different kinds of meetings, they can take certain steps to ensure that the alternatives adhere as closely to usual practice as possible. For example, private higher education providers holding hybrid meetings might consider:

• Quorum requirements, and whether these mandate that a certain number of members be physically present at the meeting venue (noting that, subject to the terms of particular company constitutions, it is sometimes possible to count the number of members granting a proxy towards the quorum; this holds even when the proxy for all members is the same person, so long as that person attends the meeting);
• Whether the chairperson of the meeting can be present at the meeting’s physical venue; and

• Where the constituent documents of the relevant higher education provider allow it, encouraging members to submit their proxies before the meeting; this way, the meeting’s position on the business before it is clear (that is, the flow of the proxies makes it clear what the result of a resolution would be, so that organisers do not need to rely on votes cast during the meeting).

It is important that higher education providers pay attention to the terms of their governance framework and details of the laws applicable to them. For a university, these laws include their establishing Acts as well as any statutes made pursuant to powers in those Acts. Without close attention to the law, a higher education provider may hold a virtual or hybrid meeting that it later finds to be invalid under the law or not compliant with its governance framework (that is, a corporate higher education provider’s meeting did not comply with the company’s constitution). In this case, any resolutions passed at that meeting will likewise be invalid. Section 1322 of the Corporations Act provides an exception for ‘procedural irregularities’ in company meetings where no substantial injustice has occurred. It also provides a mechanism for obtaining court orders to validate proceedings that might otherwise be void. Similar avenues may be available to other entities dealing with these irregularities, such as universities and other higher education providers that are not subject to the Corporations Act. This will depend on the laws applicable to each entity and the terms of their own governance frameworks.

Next steps

Please contact us if you wish to discuss the options available to your organisation. Our advisers can help higher education providers deal with any significant meetings of decision-making bodies that may be scheduled during this period of social distancing.