By Fiona Balzer, Policy and Advocacy Manager
7 September 2022
Most companies in Australia have 30 June as their financial year end. And with the requirement to hold an annual general meeting (AGMs) of shareholders within 5 months of that date, most of the ASX-listed companies hold their AGMs in October and November.
This is the opportunity for shareholders to make companiesand others aware of retail shareholders opinions on various matters, and to hold directors to account for how the company is travelling.
Voting either directly or via proxy and taking the opportunity to ask questions whether in writing or at the meeting lets the directors and executives know you care enough to put in some effort.
Australian Shareholders Association (ASA) encourages voter participation. We also have our volunteer company monitors who raise issues with the company directors and participate in the AGM and other shareholder meetings.
Shareholders are required to vote on a director’s election or re-election to the board, and they need to have support of 50% of shares voted for them to continue to hold the seat.
Remuneration and strikes:
There is also the vote on the remuneration report, which requires support of 75% of shares, or less than 25% of shares voted AGAINST to avoid what is known a first strike. The Corporations Act 2001 has included the ‘two strikes’ rule in relation to the remuneration report since 2011. At the annual general meeting, the company must include a resolution for shareholders to vote on the remuneration report.
After the first strike the companies are expected to address shareholders’ concerns, and in addition to the resolution to vote on the remuneration report, a resolution to spill the board, must be included in the notice of meeting.
After a second strike (an ‘against’ vote of 25%+ at the subsequent AGM) the board spill resolution is voted on.
The board spill resolution requires more than 50% of shares voted to be in favour of the spill meeting for it to take place. At the spill meeting, those individuals who were directors when the report was considered at the most recent annual general meeting will be required to stand for re-election (other than the managing director, who is permitted to continue to run the company).
Spill resolutions are not often successful, partly because it requires 50% of shares voted to support it compared to 25% required for the strike. Also it means the company will focus on making sure the spill meeting results in a viable board which can distract from redressing significant problems and making sure they never happen again.
Lodging a proxy vote:
You can attend and vote at the meeting yourself, lodge a direct vote or have someone vote on your behalf (a proxy).
On ASA’s website you can find instructions on how to give a proxy for an individual listed company meeting as well as how to give a standing order for Australian Shareholders’ Association or another corporate entity or individual to vote on your behalf. This standing order is known as a standing proxy and identifies your holding and who you want the proxy to go to.
To find out more, go to: https://www.australianshareholders.com.au/proxy
Voting online and via post:
We even have an online form, where we can prepare your proxy forms for you once you give us the data and the go ahead to do so. We then email the completed forms to you to sign and send to the different share registries.
You only need to complete the appropriate standing proxy form once for each of shareholdings and return the form to the relevant share registry.
If you buy more shares in a company under the same HIN/SRN, they are covered by the standing proxy.
ASA encourages members and shareholders to make their vote count by nominating ASA as their proxy. ASA also supports voting through different forms.
Paper-based forms ask for the name of one’s proxy (Australian Shareholders Association) and marking ‘for’ or ‘against’ on the page. Leaving the boxes blank means ASA will vote in accordance with its voting intentions report.
Voting online is also possible using the online voting portal via the relevant share registry website portal, or via a direct email link. Voters are encouraged to insert ‘Australian Shareholders Association’ on the page where it asks for the name of their proxy.
Why voting matters:
We encourage young ASA members to involve themselves in the voting process, too.
And we know you’re busy, that’s why we have a streamlined process to make voting easier until you have more time to do it yourself. And we report on the meetings so when you do have time, you might consider joining our company monitors and representing other shareholders like you.