Christine Mallin and Sue Newell
Information technology has a key role to play in the distribution of corporate information. Increasingly companies are using the Internet as a means of distributing information to their shareholders and other groups. Already many companies have Internet sites which contain information about their company and products. There is an ongoing debate about whether companies should distribute information about their annual general meetings via the Internet and whether if this is done, it would disadvantage private shareholders, who may not have internet access.
In this paper, we look at this area from two viewpoints. Firstly we look at the type of information that companies disseminate via the Internet, what additional information might be made available, and what barriers, legal or otherwise, may need to be overcome. Secondly, we examine the ethical dimensions to the use of the Internet for distribution of corporate information, for whilst opportunities are created, there are also important ethical dimensions to consider, for example, whether provision of information is equitable for all investors/stakeholders, or whether some are denied access to information whether on economic, logistical, or some other grounds.
In the UK, and many partner EC countries, there are a number of existing legal impediments which effectively prohibit the full utilisation of electronic commerce facilities. For example, existing legal requirements may stipulate documents as hard copy and there is doubt also as to whether an electronic signature is necessarily valid, or whether the signature must be in “writing”. In the UK, for example, there is currently doubt over whether the Companies Act 1985 permits companies to send documents to shareholders by electronic means. In some cases, such as the sending of accounts and reports, the Act clearly does not permit documents to be sent, and in other cases it is doubtful. For example, a copy of the company’s annual accounts, together with a copy of the directors’ report, and the auditors’ report, must be sent to every member of the company, every holder of the companies’ debentures, and every person entitled to receive notice of general meetings. The conventional interpretation is that “copy” implies a hard copy, since there is no provision in the Companies Act specifically enabling delivery in non-legible form.
Proposed changes to UK corporate law may enable any document which the Act requires the company to transmit physically to members to be sent, where the member has so agreed, to a fax number, or electronic address, nominated by the member. This would enable the report and accounts, the notice of meeting, and subject to EC constraints, other corporate actions to be communicated electronically. Similarly there is a proposal that a company may place any company communication required by the Act on a web-site or other electronic site accessible to members.
However in some cases it is a requirement of EC law that documents be transmitted in written form. This is the case, for example, in relation to pre-emption rights under the EC Second Company Law Directive (77/91/EEC). Any general power which is formulated will, therefore, be subject to certain specific derogations required by EC law.
The wide ranging review of company law in the U.K. and the significant amendments to the rules and regulations governing electronic communications which are likely to result are fully discussed. These changes will empower companies to utilise e-commerce to a much greater extent. We examine the significance of these proposed changes particularly in respect of the implications for individual as opposed to “group” users of such information.
This paper has the advantage of two perspectives: both an ethical viewpoint incorporating knowledge and innovation process, and a governance viewpoint incorporating the practicalities of corporate information dissemination in an information technology context.