Modernisation of Annual General Meetings

‘Bringing the AGM to the 21st Century’, we claim that there is strong need for the modernization of the AGM. We explore the AGMs’ (lack of) performance of these three functions and propose a decentralized AGM using blockchain technology.
AGMs are governed by many provisions dating back to the 19th century, notwithstanding the modernization of corporate law and decades of evolving corporate governance. Table B of the UK Joint Stock Companies Act of 1856 stated in article 70: ‘[o]nce at the least in every year the directors shall lay before the company in general meeting a statement of the income and expenditure for the past year, made up to a date not more than three months before such meeting’. Note that this provision is very similar to the current requirements in the UK Companies Act 2006, enacted one and a half centuries later.  
It should come as no surprise that corporate life has moved on since the 19th century and pays only lip service to the old-fashioned legal requirements of AGMs. Consequently, the AGM’s functions are de facto eroded. First, information that directors still need to ‘lay before the meeting’ is disclosed ad hoc, at certain intervals throughout the year and (unaudited) accounts are available often long before the AGM takes place.
Our proposal decentralizes the AGM in two ways; shareholders can participate in a decentralized blockchain network environment and the centralized yearly nature of the current AGM can be abrogated because voting items can be placed in the blockchain at any time. The technology thus not only reduces voting and meeting organizing costs substantially, but also offers faster corporate decision-making. Although the application of blockchain technology in the field of shareholder voting is still in an exploratory stage and there are many (technical) legal aspects that still need to be considered, the recent cooperation between Nasdaq and Estonia and the formation of the CSD Working Group on DLT have shown that introducing blockchain technology in this field is feasible. The clear benefits of this technology can offer important avenues for further research.
 [22 Aug 2017] Anne Lafarre, Christoph Van der Elst.