News – 19.03.2020

The Advisory Board of Finnish Listed Companies statement regarding the organization of general meetings during the coronavirus pandemic

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Ismo Hentula

Partner, Attorney at Law, eMBA

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Due to the outbreak of the coronavirus COVID 19 The Government of Finland has declared a state of emergency in Finland and the Emergency Powers Act (“Valmiuslaki”, 1552/2011) was brought into force on 17 March 2020. Significant restrictions have been put in place concerning, inter alia, public activities and travel, both domestic and international. Due to the Emergency Powers Act public gatherings have been limited to no more than ten persons, and everyone over the age of 70 have been instructed to stay at home in quarantine-like conditions. As a result, the Advisory Board of Finnish Listed Companies and the Ministry of Justice of Finland have issued guidelines regarding the organization of general meetings during the coronavirus pandemic. 

According to the Advisory Board, the functioning of the capital markets should be protected as well as possible in crisis situations, which means that listed companies must strive to make decisions on dividend payments and the organization of their administrations in a timely manner. However, the Ministry of Justice has on 18 March 2020 concluded that the limitation regarding the public gatherings applies to general meetings as well. 

Consequently, Companies must evaluate whether the general meeting can be held as planned; or if the meeting may, when the articles of association of the company so permit, be arranged with exceptional arrangements; or if the meeting can be held by the decision of the board of directors by arranging a webcast or other such remote access to the shareholders in accordance with the Section 16 of the Chapter 5 of the Finnish Companies Act, unless otherwise provided in the articles of association of the company. Additionally, companies with fewer shareholders may want to consider replacing a physical general meeting by a unanimous decision of the shareholder’s as stipulated in Section 1 of the Chapter 5 of the Companies Act. In the absence of an alternative procedure, consideration should be given to whether the holding of a general meeting can be postponed to a later date. The companies need to evaluate if the venue of the general meeting allows different halls or meeting rooms where maximum ten people can take part in the meeting. 

Shareholders have also been urged to consider the need for their own presence in the general meetings during times of emergency. This applies in particular to those at risk, such as the elderly and the persons with compromised immune systems, but also to other shareholders. It is also noteworthy that the government has required that persons over the age of 70 must remain in quarantine-like conditions at least until 13 April 2020, and that persons returning to Finland from abroad must also remain in quarantine for two weeks after their return to Finland. Therefore, members of these groups should not physically attend the general meeting under any circumstances. 

The Advisory Board has proposed urgent legislative measures to amend company legislation so that company laws would recognize exceptional situations such as the present one, where the holding of general meetings and annual meetings within the time limit of the Companies Act or the company’s articles of association may not be reached. Legislative reforms should facilitate the organization of meetings, for example remotely. 

For further information, please see here (in Finnish): “Oikeusministeriön muistio julkisten kokoontumisten rajoittamisesta valtioneuvoston linjauksissa (18.3.2020)”, ”Päivitetty kannanotto koskien koronapandemiaa ja yhtiökokousten järjestämistä (17.3.2020)” ja ”Kannanotto koskien koronaviruspandemiaa ja yhtiökokousten järjestämistä.”