A new article from the Governance Institute of Australia highlights some significant upcoming changes to AGM laws, and these are regulatory changes that Company Secretary and In-House Legal Counsel need to start to prepare for now.
As noted in the article, items on the agency include draft legislation that proposes permanent reforms on virtual AGMs, as well as the electronic execution of company documents, and adjustments to how voting works when meetings are both physical and hybrid.
According to the article, the five considerations that the Company Secretary will need to anticipate becoming law include:
- permanently allow for hybrid AGMs (simultaneous physical and virtual meetings) without the need for any constitutional amendments.
- permanently allow virtual AGMs if the constitution permits
- permanently allow for electronic execution of company documents.
- create show-of-hands as the default method for voting at both physical and hybrid meetings.
- allow members who hold at least five per cent of voting capital to request polls be independently scrutinised.
As noted by Governance Institute CEO, Megan Motto, the new round of lockdowns occurring across Australia highlights the need to make pressing decisions here, to give clarity to the Company Secretary and In-House Legal Counsel.
“The issue of AGMs, and what format they can legally be held in, is at risk of becoming the never-ending story,” Ms Motto said in the article.
“We know many organisations are clamouring for some certainty in these uncertain times, especially with the peak AGM season fast-approaching.
“Clarity on this issue will also benefit shareholders. We welcome the proposed permanent laws but hope our concerns are taken on board.”
In the meantime, the Governance Institute is recommending that the Company Secretary undertake the following steps:
- Seek legal advice on how best to prepare for various scenarios, including the risk that Parliament does not provide regulatory certainty in August and that ASIC does not extend its ‘no action’ position.
- Discuss contingency plans with your registry and technology provider.
- Establish a dedicated AGM area on your company website.
- Encourage proxy voting.
- Establish an online shareholder Q&A for the AGM.
- Encourage shareholders to provide email addresses and mobile phone numbers as part of
- preregistration to facilitate smooth shareholder updates in the event of public health announcements.
- Ensure you have a COVID safe check in at the meeting and check whether COVID marshals are required.
- Consider live streaming the AGM.
Read more about what these anticipated regulatory changes mean to the Company Secretary and In-House Legal Counsel here.