14 September 2012


In response to a request from the Government for advice on the role of the annual general meeting (AGM), CAMAC has published a discussion paper The AGM and shareholder engagement.

In releasing the discussion paper, the Convenor of CAMAC, Joanne Rees, said:

The matters considered in this paper go to the heart of corporate governance in Australia. The AGM is one of the principal means by which companies are kept accountable to shareholders. The rapidly changing technological and commercial environment makes it very timely for CAMAC to review this area.

CAMAC has identified three overarching issues, consideration of which is central to the continuing corporate governance role of the AGM:

• 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, often referred to as shareholder engagement
• the content of the annual report, being the principal document for consideration at the AGM that provides information to shareholders on the state of the company and the stewardship of the board
• the current processes, and possible future functions and formats, of the AGM, taking into account technological developments and opportunities.

The paper has considered approaches, initiatives and thinking on each of these matters in Australia and elsewhere.
Key questions raised in the discussion paper on which views are sought include:

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? This 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
• 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?

Consultation

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.

Copies of the discussion paper

Click here to download the discussion paper (PDF file, 483 KB)

Further information

For further information, please contact John Kluver, Executive Director on Phone: (02) 9911 2950. Email: john.kluver@camac.gov.au