Top governance professionals renew call for AGM overhaul
Announcement posted by Governance Institute of Australia 09 May 2016
White paper ‘Does the AGM need to become an eAGM?’ released
~~Sydney, 9 May 2016: There is a need for the annual general meeting (AGM) to be modernised to adapt for the digital age, improve its effectiveness as a communication and decision-making forum for shareholders and reduce avoidable costs for companies, say some of Australia’s leading governance professionals.
A joint LexisNexis / Governance Institute of Australia white paper, ‘Does the AGM need to become an eAGM?’, confirms that leading company secretaries strongly support amending the Corporations Act 2001 (Cth) to permit companies to deliver meeting materials to shareholders electronically, and permit electronic voting on company resolutions.
The white paper also found that company secretaries favour changing legislation to clarify companies’ ability to implement direct voting, which is generally considered a more representative and ‘democratic’ form of decision-making. While companies can currently implement direct voting voluntarily by changing their constitutions, to date fewer than 20 companies have done so.
“Given that direct voting greatly enhances voting integrity, governance professionals believe an explicit legislative provision could be the jolt needed to boost take-up. Allowing shareholders to vote directly, particularly online, is one of the foundations for modernising the AGM and should be actively encouraged by the Corporations Act. It means all shareholders can have their say on resolutions — regardless of whether or not they physically attend the AGM”, says Governance Institute’s Chief Executive Officer Steve Burrell.
LexisNexis Australia’s Managing Director, Joanne Beckett, observed that the white paper confirms challenges faced by the governance community amid a climate of plunging attendance rates at the AGM. The white paper also indicates that governance professionals today need an added range of technical skills to meet the current commercial challenges surrounding AGMs.
“Not only do they need to be familiar with the technical requirements of holding a compliant AGM, they also need to keep up to date on key technological innovations — whether that be webcasting platforms, voting apps or other electronic devices — that tap into stakeholder needs, in order to develop a genuinely engaging and effective AGM”, said Ms Beckett.
Differing views were expressed on whether a fundamental re-structure of the AGM is necessary to boost shareholder interest and participation. However, it was observed that the current legal framework is flexible enough to allow companies to choose a model that best suits them
and their shareholders’ needs, including splitting the AGM into separate meetings — one dedicated to voting and the other to a retail shareholder briefing.
“Nevertheless, the changes to permit electronic delivery of meeting material and direct voting are a necessary first step to bring the corporations law in line with modern technology and communication practices, and will enhance outcomes for both companies and shareholders”, Mr Burrell concluded.
‘Does the AGM need to become an eAGM?’ reflects the views of eight senior company secretaries and governance professionals of Australia’s top ASX-listed companies conveyed at a roundtable discussion held in March 2016. The White Paper paper can be accessed at: http://lexisnexis.com.au/media-centre/blog-articles/2016-May-05-Does-the-Annual-General-Meeting-need-to-become-an-AGM.html
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Media Contacts:
Viv Hardy, CallidusPR
T: +61 2 9283 4113
E: viv@calliduspr.com
Polina Madorsky, LexisNexis
T: +61 2 9422 2212
E: polina.madorsky@lexisnexis.com.au
Steven Burrell, Governance Institute
T: +61 2 9223 5744 / +61 407 708 485
E: steven.burrell@governanceinstitute.com.au
About LexisNexis Legal & Professional
LexisNexis© Legal & Professional is a leading global provider of content and technology solutions that enable professionals in legal, corporate, tax, government, academic and non-profit organisations to make informed decisions and achieve better business outcomes. As a digital pioneer, the company was the first to bring legal and business information online with its Lexis® and Nexis® services. Today, LexisNexis Legal & Professional harnesses leading–edge technology and world–class content, to help professionals work in faster, easier and more effective ways. Through close collaboration with its customers, the company ensures organisations can leverage its solutions to reduce risk, improve productivity, increase profitability and grow their business. LexisNexis Legal & Professional, which serves customers in more than 175 countries with 10,000 employees worldwide, is part of RELX Group plc, a world-leading provider of information and analytics for professional and business customers across industries.
LexisNexis® Pacific is the leading provider of local and international news, business, tax and legal information, using leading-edge technology, tools and digital solutions. Both in Australia (www.lexisnexis.com.au) and New Zealand (www.lexisnexis.co.nz) LexisNexis Pacific works in close collaboration with its customers to provide content-enabled workflow systems for professionals in law firms, corporations, government, law enforcement, tax, accounting, academic institutions and compliance assessment.
About Governance Institute of Australia
A joint LexisNexis / Governance Institute of Australia white paper, ‘Does the AGM need to become an eAGM?’, confirms that leading company secretaries strongly support amending the Corporations Act 2001 (Cth) to permit companies to deliver meeting materials to shareholders electronically, and permit electronic voting on company resolutions.
The white paper also found that company secretaries favour changing legislation to clarify companies’ ability to implement direct voting, which is generally considered a more representative and ‘democratic’ form of decision-making. While companies can currently implement direct voting voluntarily by changing their constitutions, to date fewer than 20 companies have done so.
“Given that direct voting greatly enhances voting integrity, governance professionals believe an explicit legislative provision could be the jolt needed to boost take-up. Allowing shareholders to vote directly, particularly online, is one of the foundations for modernising the AGM and should be actively encouraged by the Corporations Act. It means all shareholders can have their say on resolutions — regardless of whether or not they physically attend the AGM”, says Governance Institute’s Chief Executive Officer Steve Burrell.
LexisNexis Australia’s Managing Director, Joanne Beckett, observed that the white paper confirms challenges faced by the governance community amid a climate of plunging attendance rates at the AGM. The white paper also indicates that governance professionals today need an added range of technical skills to meet the current commercial challenges surrounding AGMs.
“Not only do they need to be familiar with the technical requirements of holding a compliant AGM, they also need to keep up to date on key technological innovations — whether that be webcasting platforms, voting apps or other electronic devices — that tap into stakeholder needs, in order to develop a genuinely engaging and effective AGM”, said Ms Beckett.
Differing views were expressed on whether a fundamental re-structure of the AGM is necessary to boost shareholder interest and participation. However, it was observed that the current legal framework is flexible enough to allow companies to choose a model that best suits them
and their shareholders’ needs, including splitting the AGM into separate meetings — one dedicated to voting and the other to a retail shareholder briefing.
“Nevertheless, the changes to permit electronic delivery of meeting material and direct voting are a necessary first step to bring the corporations law in line with modern technology and communication practices, and will enhance outcomes for both companies and shareholders”, Mr Burrell concluded.
‘Does the AGM need to become an eAGM?’ reflects the views of eight senior company secretaries and governance professionals of Australia’s top ASX-listed companies conveyed at a roundtable discussion held in March 2016. The White Paper paper can be accessed at: http://lexisnexis.com.au/media-centre/blog-articles/2016-May-05-Does-the-Annual-General-Meeting-need-to-become-an-AGM.html
####
Media Contacts:
Viv Hardy, CallidusPR
T: +61 2 9283 4113
E: viv@calliduspr.com
Polina Madorsky, LexisNexis
T: +61 2 9422 2212
E: polina.madorsky@lexisnexis.com.au
Steven Burrell, Governance Institute
T: +61 2 9223 5744 / +61 407 708 485
E: steven.burrell@governanceinstitute.com.au
About LexisNexis Legal & Professional
LexisNexis© Legal & Professional is a leading global provider of content and technology solutions that enable professionals in legal, corporate, tax, government, academic and non-profit organisations to make informed decisions and achieve better business outcomes. As a digital pioneer, the company was the first to bring legal and business information online with its Lexis® and Nexis® services. Today, LexisNexis Legal & Professional harnesses leading–edge technology and world–class content, to help professionals work in faster, easier and more effective ways. Through close collaboration with its customers, the company ensures organisations can leverage its solutions to reduce risk, improve productivity, increase profitability and grow their business. LexisNexis Legal & Professional, which serves customers in more than 175 countries with 10,000 employees worldwide, is part of RELX Group plc, a world-leading provider of information and analytics for professional and business customers across industries.
LexisNexis® Pacific is the leading provider of local and international news, business, tax and legal information, using leading-edge technology, tools and digital solutions. Both in Australia (www.lexisnexis.com.au) and New Zealand (www.lexisnexis.co.nz) LexisNexis Pacific works in close collaboration with its customers to provide content-enabled workflow systems for professionals in law firms, corporations, government, law enforcement, tax, accounting, academic institutions and compliance assessment.
About Governance Institute of Australia