Unravelling the Electronic AGM Reforms in Australia

The annual general meeting landscape has drastically changed in Australia ever since the start of the COVID-19 pandemic. As part of the government’s response to the pandemic crisis in early 2020, the Australian Securities & Investment Commission (ASIC) has introduced temporary measures for companies holding AGMs. Public companies were allowed to extend the deadlines for submitting financial reports and holding AGMs. Moreover, virtual and hybrid AGMs are encouraged to substitute traditional meetings.

In October 2020, a bill was introduced that permits shareholder meetings and gatherings to go completely virtual. However, various shareholder groups have criticised this rule as the virtual-only meetings can limit investors’ and shareholders’ engagement, as well as the transparency of the company. The Australian Shareholders Association has expressed support for hybrid meetings as the norm of AGMs.

With such scrutiny, the Corporations Act has been amended to allow more involvement of technology in holding AGMs and facilitating better engagement. Read on to know what it means for your company.

Latest Reforms to the Corporations Act

As of March 2022, the permanent reforms under the Corporations Act Amendment (Meetings and Documents) Act 2022 (The Act) has passed the Australian Parliament and came into effect on February 23, 2022.

Holding electronic AGMs

Under the new reforms, companies may now hold annual general meetings through a hybrid or virtual-only format, using virtual meeting technology. Starting April 1, 2022, completely virtual meetings are only permitted upon the company’s constitution. Therefore, more companies have the flexibility to adopt hybrid annual meetings, given that the physical location is not enforced with any restrictions.

Moreover, ASIC announced the development of ASIC Corporations Instrument 2022/129 allowing additional time for companies who will opt to conduct virtual-only meetings. Though this is subject to conditions, companies and schemes are given an additional two months until May 31, 2022, to hold their virtual AGMs.

To help streamline virtual-only or hybrid AGMs, companies may use a virtual AGM platform that can provide a seamless experience for viewers — real-time webcast, voting, and Q&A. For more tips on conducting AGMs through technology, you can check the joint guidance authored by the Governance Institute of Australia, the Australian Institute of Company Directors, the Australasian Investor Relations Association, and the Law Council of Australia.

Electronic meeting-related documents

One of the reforms of this Act includes the use of technology in dispatching meeting documents. It permits the electronic sending to directors, members, auditors, and other involved parties of the ‘covered documents’ which include:

• AGM-related meeting documents
• Documents relating to resolutions
• Annual financial report
• Notice of members’ rights to receive documents in their preferred format

Companies and schemes can send the meeting documents electronically provided that the documents are readily accessible (e.g. annual reports published on the website) and that the members or shareholders have agreed to this format.

Members can elect, at least once every financial year, if they want to receive documents physically, electronically, or receive only some of them. Additionally, members can make ‘ad hoc’ requests of receiving physical documents shortly after they have received the electronic documents, or vice-versa. It is of grave offence if companies do not notify them of their right to vote on this matter.

Quorums

With these amendments, meeting quorums and electronic voting are now deemed with defined value. Under the latest reforms, shareholders or members attending in-person or online are all taken as ‘present’ in the meeting. It is recommended for companies and schemes to hold AGMs at a reasonable time to account for all participants joining in the physical location or through the virtual meeting technology.

‘Reasonable opportunity to participate’

Shareholders or members are entitled to attend the AGM and should be given a reasonable opportunity to participate. This ‘opportunity’ extends to all participants whether on-site or online. According to ASIC, the changes in the meeting environment must be accounted for to promote genuine interaction between the board and the members.

Holding a hybrid or online-only meeting requires a virtual technology that will facilitate virtual attendance, voting, questions, and debate on company matters. All registered participants are entitled to cast votes on resolutions and elections via virtual technology.

Moreover, they should be allowed to consider responses and debates before finalising their votes. The Act also permits members to vote in real-time even if they can record a vote pre-meeting.

Under the new legislation, shareholders or members are granted the opportunity to raise questions, give comments, and discuss arising matters whether in person or online. Using the same virtual technology, members should be able to participate in discussions, orally or in writing.

ASIC also provided in their guidelines in 2021 that support an equal opportunity to participate, even pre-meeting. If there are questions or comments from the members before and/or during the meeting, the selection process must be fair, transparent, and representative of the questions answered or not.

A virtual technology, like ConveneAGM, can allow and manage the engagement of members and shareholders. The virtual AGM platform provides live voting and live Q&A that can emulate physical meeting participation in the virtual form.

Its electronic voting feature enables members to vote conveniently on their screens on resolutions and elections. Members can instantly see the results once votes are finalised. ConveneAGM also supports real-time two-way discussions with its live Q&A feature that can be used to ask and address questions and comments through text or video. This allows transparency and accountability for better governance of Australian companies and schemes.

Navigate AGM reforms with an end-to-end virtual AGM platform

With these permanent reforms in the Corporation Act 2001, companies can now readily exercise shareholder and member relations as more meeting formats — hybrid AGMs — are allowed. Electronic dispatching of meeting documents also provided a more convenient approach for administrators who would need to print out and mail files. Furthermore, defined measures for attendance, voting, and participation could boost member engagement.

ConveneAGM, the leading AGM platform for member meetings in Australia, can help companies and schemes to comply with the reforms while fostering genuine interaction. The all-in-one platform assists meeting administrators from registration to documentation of the whole AGM.

It provides a real-time webcast of the AGM for virtual attendees and intuitive on-screen tools like live voting and live Q&A that cultivate the same meeting experience of physical attendees — designed perfectly for hybrid member meetings.

Empower engagement, compliance, and efficiency on your next hybrid meeting with ConveneAGM. Request a demo with us to find out how it can boost your meetings.