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Amend by-laws to hold virtual AGMs

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By Fred Sitati

Annual general meetings remain the single most important occasions in the calendar for all cooperatives.

They afford the ordinary members the opportunity to exercise their democratic rights and supremacy including limited to electing their leaders.

It is at the AGMs that members have the opportunity to receive the statutory annual audited accounts from external auditors, resolve on the disposal of surpluses, if any, and chart the future of their cooperatives, among others.

In view of this significant role, all cooperatives need to strictly observe the laws governing annual/special general meetings which include the following; issuance of sufficient notices to the members (usually 15 clear days’ notice), which specify the date, venue and time of the meetings.

The notice should also specify the agenda to be transacted at the meeting.

Before commencement of the meeting, the convener (the Board/Committee) should to confirm the presence of quorum as per the society’s bylaws.

The meeting should thereafter commence once the notices convening the meeting are duly adopted.

Other procedural details relating to conduct of AGMs are well covered in the respective registered bylaws of all cooperatives

This has been the standard practice for all cooperatives for the longest time as it relates to convening of general meetings 

However, progressively, some cooperatives have attempted or held virtual general meetings on seeking clearance from the Commissioner’s office in cases where their bylaws do not expressly provide for virtual or hybrid meetings.

While so far no major concerns have been raised regarding the effectiveness of such AGMs, I want to raise the following matters.

  1. According to the Gazetted Advisory on holding of  Virtual general meetings for societies ( registered under Cap 108 of the Laws of Kenya) and signed by  the Registrar-General  from the State Law Office on 12th  August 2020, holding of virtual or hybrid annual  general meetings must fulfil certain  requirements which include;
  • Issuance of sufficient Notice to members.
  • Agree on the selected software to use.
  • Whether the general meeting is virtual or hybrid.
  • Guide members on the manner in which the meetings shall be conducted in terms of members participation and whether it shall be entirely virtual or hybrid and how members will join the deliberations.
  •  Have a mechanism for confirming the presence of quorum and have the participants recorded.
  • Agree on how elections shall be conducted and tallied online and by whom.
  • Ensure no unauthorised persons interfere with the meeting deliberations.
  • Ensure confidentiality is maintained throughout and that the video recordings are safely kept by authorised official.
  • Ensure the proceedings are reduced into writing in form of minutes etc

Questions to cooperatives aspiring to hold virtual or hybrid Annual general meetings may include the following:

  • How many cooperatives have amended their bylaws to provide for virtual meetings in general?
  • What mechanisms have they put in place to ensure that quorum and attendance of members are verifiable?
  • What preparedness is in place to ensure cooperative officers attend and preside over meetings and more particularly conduct elections for retiring members?

These key stakeholders should participate to effectively authenticate Societies’ records.

  • What tools are in place to use in tallying votes electronically?
  • The law requires cooperatives to avail copies of audited accounts to members at least 14 days prior to the D-Day, what arrangements have Societies made to make this achievable?
  • How about transacting Agenda on “Reading and Confirmation of previous AGM minutes”, in what format will this be handled?
  • What measures will the Societies take to ensure all members are able to participate effectively and what assurance is there that all members are able to navigate the electronic gadgets like smartphones or laptops assuming they possess them?

As far as I am concerned, a lot still needs to be done to prepare conducive and enabling environment for holding valid virtual or hybrid AGMs.

While technology is here to stay, deliberate measures need to take sooner rather than later to streamline the participation of cooperatives in virtual meetings.

While covid-19 pandemic is the reason we need to change the way cooperatives do business, this should be done with extreme care because there could be leaders out there who want to take advantage of the new Normal to hold sham or shambolic general meetings that could have far reaching ramifications to the financial well being of these vulnerable entities.

I’m not privy to the situation on the ground but for a start, cooperatives should be compelled to amend their bylaws and be sensitized or trained on how committees and members can comfortably participate in these new modes of communication without exposing themselves to manipulation by some of their leaders and staff.

To crown it all, it is apparent that to a large extent, cooperatives are not prepared to roll out effective and valid virtual general meetings as desired.

It should no longer be business as usual for cooperatives to engage in virtual communication including use of electronic payments before amending their bylaws.

I have reiterated this for the umpteenth time and I remain optimistic that the time to act is now.

Let us in all fairness delink the process of amending societies’ bylaws from the on-going review of the National cooperative legislation.

I rest my case!

 Blurb

While covid-19 pandemic is the reason we need to change the way cooperatives do business, this should be done with extreme care because there could be leaders out there who want to take advantage of the new Normal to hold sham or shambolic general meetings that could have far reaching ramifications to the financial well-being of these vulnerable entities.





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