SYDNEY (October 23, 2020) The Australian Treasury has announced a public consultation on proposed changes to the Australian Corporations Act which include allowing for companies to host virtual-only shareholder meetings under any circumstances, and removing any requirement for a physical shareholder meeting. The government has provided only a short window for responses, which are due October 30, 2020, and falls during the ongoing Australian annual meeting season. ISS’ 2020 annual global policy survey, the results of which were released last month, finds a significant majority (77 percent) of investor respondents support hybrid shareholder meetings allowing for both physical and virtual (online) attendance, while just 11 percent of investor respondents support virtual-only meetings, except under exceptional circumstances when physical or hybrid meetings (i.e., that provide the option of either physical or virtual participation) are not possible. Virtual-only meetings can serve to limit shareholders’ abilities to engage with corporate officials, raise questions, and hinder the transparent expression of views. Examples of such concerns have been seen at some virtual-only AGMs in recent months. Due to the potential for virtual-only shareholder meetings to diminish shareholder rights, particularly without sufficient protections in place, we believe it is important for institutional investors with views on this matter to respond to the consultation, and make their views known.
An ISS analysis of Australian annual meeting season thus far finds approximately one in four companies seeking shareholder approval to amend their constitution to permit virtual-only meetings. Voting results for these resolutions, which require 75 percent support to pass, are not yet available. This raises added concern that shareholders have not been given adequate time to consider the implications of the virtual meetings in this season. ISS will continue to closely monitor these and other developments for clients with holdings in the Australian market.