Gov. Phil Murphy has signed legislation, strongly advocated by NJBIA, that gives corporations and certain other financial institutions the flexibility to continue conducting fully remote shareholder meetings even after the COVID-19 pandemic is over.
The law, P.L.2021, c.202, sponsored by Assembly Majority Leader Lou Greenwald (D-6) and Senator Patrick Diegnan (D-18), also extends the remote shareholder meeting option to certain financial institutions, such as banks, savings and loan associations, savings banks, and capital stock associations.
“The enactment of this law shows that state government is leaning into some effective changes made during the pandemic that both companies and their shareholders view positively,” NJBIA Vice President of Government Affairs Christopher Emigholz said. “Online meetings are often less expensive for the companies holding them and more convenient for participants to attend.”
Emigholz said companies that held shareholder meetings online to avoid mass gatherings during the pandemic found their virtual meetings generated higher attendance and greater engagement.
“Companies have also saved time and money by switching from in-person meetings to virtual meetings and it is smart policy to allow corporations the flexibility to continue doing so if they wish,” Emigholz said.
According to a national study of virtual shareholder meeting practices released by the Rutgers Center for Corporate Law and Governance, nearly 2,500 corporations held virtual shareholder meetings in 2020 because of the pandemic and related health concerns that led to quarantines and government restrictions on large indoor gatherings and travel.