Starting 19th April 2020, Thai authorities will permanently allow companies to convene board meetings and shareholders meetings using digital tools, coming as a significant regulatory change that addresses the difficulties faced by companies in doing so amid the COVID-19 outbreak. This means that board members, shareholders, and management executives can now conduct meetings even during instances of a city or provincial-wide lockdowns, international travel bans, and social distancing measures.
The easing of restrictions in digitally conducting these meetings contrasts with the previous requirement of having all key attendees physically attend meetings at a predetermined place, date, and time. Although the requirement was previously eased in 2014 under the ‘Old Law[1]’, which allowed digital attendance under certain circumstances, many companies still preferred attendees to physically attend the meetings as this was considered the more practical alternative. Moreover, attendees were still required to be in Thailand during the meetings with one-third of the quorum has to be in physical attendance.
What is most interesting about the New Royal Decree[2] is the fact that digital meetings are now considered legally binding and can be used as evidence in court along with any other electronic documents compiled during their course. Though this decree has been introduced as a way of getting past difficulties that have arisen as a result of COVID-19, this could signal Thai legislation embracing new aspects of conducting business activities and may be seen as a precedent to legislation concerning other innovations.
As with the old version of the law, this will apply to board meetings and shareholder meetings for both private and public companies that are registered in Thailand. This includes companies that use any corporate structure including partnerships, trade associations, and chambers of commerce.
New requirements summarized
Under the New Royal Decree, the Thai Government has ruled several conditions that must be met in order to qualify as sanctioned board meetings or shareholder meetings. The provisions are summarized below:
- Board members and shareholders are permitted to attend meetings via phone or video call and do not have to be present in Thailand;
- Attendees are required to verify their identities prior to the start of the meeting;
- Disclosed or secret voting can be conducted;
- Audio or audiovisual recordings must be taken unless a secret meeting is conducted as these would be considered key conference documents;
- Electronic data pertaining to attendees must be kept as evidence which, again, would be considered key conference documents;
- Minutes of the meeting should be written;
- Rather than using postal mail to send out meeting invitations and other relevant materials, companies can use e-mail. Copies of these emails must be kept as evidence.
To supplement the new decree, the Ministry of Digital Economy and Society is expected to issue an announcement highlighting the security standards that must be adhered to for these meetings to take place. However, the existing security standards highlighted in the old law will continue to be used until such a time the announcement is promulgated into law. These include having sufficient and reliable IT infrastructure and security, the chairperson being able to disconnect in case of emergencies, and the ability of the attendees to be able to view any data they are distributing to the company through their devices. Companies may also need to comply with the provisions highlighted by the Personal Data Protection Act, particularly with regard to obtaining consent from the attendees if data is required from them.
It is also worth noting that the general procedures that take place before and during meetings, notably writing out the minutes of the meeting, still apply to digital meetings as they do with their physical counterparts.
What technologies should be used?
In order to comply with the new decree, as well as enact best practices for conducting digital meetings, Silk Legal recommends using software that provides the ability to share information and documents between all attendees. The software used should also be capable of allowing attendees to share their screens and record the contents of their meeting as these would be considered important legal documents. A few notable examples of such software include Zoom, Microsoft Teams, and GoToMeeting, though any other software that has the same capabilities can be used.
As this is a recent development, Silk Legal will continue to monitor any additions or changes to this regulation. For more information on this update or for any inquiries regarding board meetings and shareholders meetings, please contact us at [email protected].
[1] Announcement of the National Council for Peace and Order No. 74/2557 on Teleconferences through Electronic Means (2014).
[2] The Emergency Royal Decree on Electronic Media Conference B.E. 2562 (2020)
