By Rachel Waterhouse, CEO
30 September 2022
Investing in a company requires faith that the Board and executive will always make the best decisions. However, it is blind faith without exercising oversight.
Recently, Fiona Balzer and I attended a non-ASA investor group and the attendees advised they did not actively vote at the shareholder meetings of the companies in which they invested.
This is alarming at a time when retail shareholders need to flex their collective voting muscles to highlight concerns about poor governance and conflicts of interest. Annual General Meetings and other meetings of companies provide opportunities for you – as the shareholder – to give your views about the performance of the directors and executives and express an opinion of what a company’s future should be. A meeting will often have resolutions seeking support of a remuneration report or to elect or reappoint a company director, but sometimes they will veer into other areas, such as approving new business schemes or remuneration structures.
Voting is an important right for all shareholders to exercise, not just the large institutional investors, and it’s important you have your say. Every vote counts and allows your voice to be heard. Obviously, the most direct way of participating is by attending the meeting and voting in person or online. But if that isn’t an option, you might want to appoint a ‘proxy’. A ‘proxy’ is someone who attends a general meeting and votes in place of a company member. You have a statutory right to appoint someone for whatever reason.
When you exercise the right to a proxy, you may still attend a shareholder meeting as a non-voting shareholder. As the representative of retail shareholders, Australian Shareholders’ Association reviews the performance and governance of 140 listed companies, through our company monitoring program, and attends AGMs on behalf of our members.
This program sees us meeting with Board members and posing questions to them about performance and governance issues. We make voting intentions available on our website for each monitored company at least 14 days ahead of the AGM. And we attend AGMs on behalf of our members. Last year, retail shareholders provided ASA with 35,323 proxies, covering $3.4 billion worth of investments.
Such representation of retail shareholders means we are often acting as proxy for the equivalent number of shares as one of the top 20 shareholders at these meetings. By appointing ASA as your standing proxy, ASA will vote on your behalf at all future meetings of the company. It removes the hassle of filling in proxy forms for every meeting and you can vote at any meeting yourself if you wish – with the last dated instruction from you being valid for that specific meeting.
The standing proxy will persist until revoked in writing by you. When you give us your proxy, we don’t know your name or the size of your holdings – we only know the aggregate number of proxy givers and the associated number of shares, and the number of open and directed votes (directed for, against, or abstain). But the proxy allows us to ask questions at the meeting and be seen as an important stakeholder by directors and executives.
If you buy more shares in a company under the same HIN/SRN, you don’t need to complete a new form. For more information on how you can provide your proxy and add your voice to the collective retail shareholder position, go to the ASA website.
ASA’s focus areas outline the key issues we will explore both during the pre-AGM meeting with the Chair and Directors and at the AGM itself.
The focus areas for the main AGM season include:
- fair treatment of shareholders;
- directors and boards (including director skills and workload and managing cyber and data risk);
- remuneration; and
- environmental, social and governance (ESG reporting including risks and the avoidance of green washing).
You can read more about ASA’s focus issues for the AGM season on the ASA website.