Below are key takeaways from ISS’ recently released 2023 Proxy Season Review – Australia & New Zealand. The full report is available to institutional subscribers by logging into ProxyExchange then selecting the Governance Exchange and its Report Center tab and to corporate subscribers by logging into Governance Analytics then selecting the Governance Exchange and the Report Center tab.
- “Strikes” against remuneration reports surged in 2023: The number of companies in the ASX300 with “strikes” (25 percent or more votes against a remuneration resolution) increased significantly in 2023 to a record 42. The previous high was seen in 2020 and 2021, each with 28 strikes. Whereas the historical pattern of strikes was skewed towards the smaller companies in the ASX300, this was not the case in 2023. The largest number of strikes was amongst ASX200 companies.
- Trend continues towards higher votes against director elections: Whilst some shareholders continue to vote against directors for issues including non-independence or overboarding, 2023 AGMs saw shareholders targeting directors of companies with specific underperformance and governance issues. While in prior years elevated votes against directors were most common in the smaller companies in the ASX300, this was not the case in 2023, with directors of larger ASX100 and ASX200 companies having substantial votes against their elections.
- Frequency of climate proposals subdued in 2023: After considerable debate on emissions reduction initiatives of Australia’s largest emitters, AGMs in 2022 saw eight large ASX 100 companies submit their management endorsed say on climate resolutions. Additionally, there were 11 companies in 2022 with climate-related shareholder proposals. Subsequently, shareholder activity in regard to environmental proposals was relatively subdued in 2023 with only 6 companies with environmental shareholder proposals. There were also 3 companies with management say-on-climate proposals, which had an average shareholder support level of 91.5 percent. Going forward into 2024, the strategies of shareholder proponents are yet uncertain; however, an increase in activity may be on the horizon again. Early indications suggest that shareholder proponents may be targeting directors of some large companies with “vote no” campaigns which have not previously been seen in this market.
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By: Daniel Qi, Mark Fenol, Isabelle Castaneda, Vas Kolesnikoff
