While the business environment continues to be highly disrupted by lockdowns and remote working best practice, Company Secretaries should start looking forward to early 2022, at which point some important virtual AGM relief is set to expire.
As was reported by AICD in August, the Australian Senate extended temporary relief for virtual AGMs and electronic documents to early 2022.
This relief means that until 31 March, 2022, companies can:
- Hold virtual AGMs (regardless of any constitution requirements for in-person AGMs);
- Distribute meeting related materials to shareholders and members electronically; and
- Validly execute documents electronically.
This is common sense policy in allowing companies to continue as normal when physical, face-to-face meetings are either not advised or in breach of lockdown requirements. For those Company Secretaries that are tasked with managing AGMs through to the expected ending of lockdowns across Australia, this will come as a relief.
However, these relief measures remain temporary, and Company Secretaries should remain cognizant that, once they expire, AGMs will need to be managed again as prior to the COVID-19 pandemic.
AICD and other representative bodies are pushing for permanent reforms in areas such as continuous disclosure law. As AICD outlined in its article:
“Over recent years, the negative impact of securities class actions has been widely felt, particularly on the cost and availability of directors and officers’ insurance. The AICD has been an active participant in public debate on the need for securities class action reform in Australia.
“Under the reforms, the permanent re-introduction of a fault element in respect to director liability means that corporations and their officers will only be liable for breaches of continuous disclosure laws where material information is “negligently, recklessly or intentionally” withheld from the market. The reforms extend to misleading and deceptive provisions applying to listed company disclosures.
“The introduction of a fault-based approach is an important step for the Australian market and will bring us closer into line with jurisdictions such as the United Kingdom and United States.”
However, there is no indication as yet that the government will consider reform in this area. For now Company Secretaries should prepare for a return to “normal”, while also looking at what contingency measures might be necessary in the event of further disruption into the new year.
For more information on this, read the full AICD article here. Greenfields Recruitment And Search is the specialist in helping companies find the right Company Secretary talent for the challenging market conditions. Talk to us today to see how we might be able to help you find the right people.