GILES RAFFERTY, Corporate Communication and Media Advisor
Talking the talk at virtual AGMs
As AGM season looms large, the Australian Federal Government has given clarity around what will be required to hold a virtual Annual General Meeting during the latter part of 2021. A key change, compared to the COVID-19 inspired temporary arrangements introduced in 2020, is the explicit requirement for virtual attendees to have the opportunity to ask a question orally, whether they are attending a hybrid or completely virtual AGM.
The Treasury Laws Amendment (2021 Measures No. 1) Act 2021 (the Bill) came into force on 14 August 2021, and covers investor meetings and AGMS up to the 31st of March 2022. Alongside the requirement to use technology that allows shareholders attending and AGM virtually to directly ask questions orally, the Bill also allows virtual attendees to be counted todetermine whether there is a quorum present. It also identifies the registered office of the company as the location for a virtual only AGM. The time at the registered office when a virtual only AGM is being held will be the official time for the meeting.
In addition, if a document is to be tabled at a virtual AGM, the company must make reasonable efforts to allow members access to the document in advance of the meeting or during the meeting by using screen-sharing technology to display the document. There are also provisions in the Bill that allow companies to execute documents electronically, which means companies can use electronic signatures, electronic fixing of seals and the option to execute a document by having different directors sign different copies of the same document.
Default to electronic documents
Another change that is likely to be welcome by companies is the removal of the obligation to let shareholders know they can receive hard copies of documents, which also removes a significant cost and compliance burden, especially for companies with large share registers. Companies can now send a Notice of Meeting to shareholders by electronic means or alternatively physically post shareholders an advisory note of the electronic address where the notice of meeting can be downloaded. Shareholders do still have the right to request hard copies but the default is electronic delivery.
Updates to a company’s constitution
The Bill’s provisions will be replaced by permanent changes to the rules governing virtual AGM’s that are expected to come into force after 1 April 2022. It is expected that under these permanent changes virtual AGM’s will only take place if a company’s constitution expressly allows it. It will be interesting to see how many companies take the opportunity update their constitutions to ‘hard-wire’ the option to hold virtual meetings in the future.
The obligation to allow for direct interactions between a company and its shareholders who choose to be virtual attendees at AGM’s is likely to mean the Investor Relations team will have to give more thought to how to manage this level of interaction.