Australia’s CAMAC reviews the Annual General Meeting and shareholder engagement

The Corporations and Markets Advisory Committee has released their AGM and shareholder engagement discussion paper.  It identifies three overarching issues:

·         the role of the AGM within the broader context of the ongoing relationship between the board and the institutional and retail shareholders of the company

·         the content of the annual report

·         the current processes, and possible future functions and formats, of the AGM, taking into account technological developments and opportunities.


Key questions raised in the discussion paper on which views are sought include the following for each category:


Shareholder engagement:

·         Should there be more formalised guidance on how the members of a company’s board engage with shareholders?

·         Should the equivalent of the UK Stewardship Code be introduced into Australia? (The Code sets out principles and guidance on how various institutional shareholders should discharge their position as significant equity owners.)

·         Does the manner in which institutional shareholders utilise the services of proxy advisers require enhanced guidance or regulation? (See a summary of how Canadians are canvassing stakeholders on this issue HERE.)

·         Should the right of 100 members to call an extraordinary general meeting of shareholders be abolished?


Annual reports:

·         Do annual reports contain unnecessary “clutter”?

·         Should annual reports more clearly distinguish between a high level strategic report (which identifies the strategy and future direction of the company as well as the challenges facing it) and other supporting information?

·         What technological developments might be employed to assist shareholders to glean useful information from the annual report?


Conducting the AGM:

·         Are there unnecessary timing or other barriers to shareholders placing matters on the AGM agenda or having supporting statements circulated?

·         Should shareholders have greater scope for passing non-binding resolutions?

·         Should a chair have the power to impose any time, or other, limits on individual shareholders speaking at the AGM?

·         Should the circulation of pre-completed proxy forms be permitted?

·         Should third parties be able to collect and send to the company completed proxy forms?

·         Is there a problem with “lost” or “miscounted” votes?

·         Should the renting of shares be regulated?

·         Who should be entitled to information about proxy and direct voting trends before the AGM?

·         Should there be legislative backing for online voting during the AGM?

·         Should voting by show of hands be abolished in some or all instances?

·         What procedure might best ensure the independent verification of votes cast at an AGM?

·         Are any steps necessary to promote greater consistency in the disclosure to the market of voting results?

·         How often should directors be obliged to stand for re-election?

·         Should there be further legislative controls over the voting procedure for electing directors?


Future of the AGM:

        ·        Should the functions of the AGM be changed in some manner for some or all public companies?

        ·        Should the obligation to hold an AGM be abolished?

        ·        Should ‘online-only’ or ‘virtual’ AGMs be permitted?


The CAMAC paper can be found HERE. 


Written submissions on any matter in the discussion paper are invited by Friday 21 December 2012.  CAMAC also anticipates holding a roundtable in 2013 with major stakeholder groups.

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