It is time for our public company clients with 30 June year-ends to start preparing meeting materials for their annual general meeting (AGM) to ensure that meetings are held before 30 November 2024.
This year, it is likely that:
hybrid meetings will continue to be popular, with virtual-only meetings only possible if expressly permitted in a company’s constitution;
timing considerations will remain key particularly since ASIC has advised that a 7-day review period for related party resolutions will likely be insufficient; and
director remuneration, cyber-security resilience and environmental, social and governance strategies will be hot topics for shareholders.
More details on these issues and other relevant considerations are set out below.
Director nominations
Listed entities need to ensure the closing date for receipt of director nominations is announced at the appropriate time in accordance with the ASX Listing Rules and the company’s constitution.
ASX Review
A notice of meeting (NOM) containing Listing Rule resolutions will need to be submitted (together with the proxy form) to ASX for review before dispatching to shareholders. Typically, the ASX review period is 5 business days, but complex resolutions or transactions may require additional time. If listed companies will require waivers in connection with any resolutions to be considered, additional time should be allowed to obtain the waiver as this is not incorporated in the 5-business day review period.
ASIC Review
The ASIC review period for related party resolutions is usually 14 days (although an application to shorten the review period can be made subject to a fee). ASIC has recently reminded companies that less than 7 days’ notice may not be sufficient for review of related party benefits. ASIC also recommends that companies complete the ASX review process prior to commencing the ASIC review process, otherwise re-lodgement may be required if ASX requires any changes to the lodged document. Accordingly, if related party approval is required, companies should provide ASIC with meeting materials (including proxy forms) as soon as possible after the receipt of confirmation that ASX has no objections to meeting materials.
Date of the AGM and NOM circulation
AGMs for listed and unlisted public companies with a financial year of 30 June will need to be held by 30 November 2024. This means that the NOM will need to be finalised and sent to shareholders by the end of October 2024. Listed companies must disclose the proposed date of the AGM within 5 business days before the cut-off for director nominations, which is usually done by listed companies announcing key dates around the annual reporting and meeting processes.
Meeting format and voting
Meetings can be held physically, as a hybrid meeting or wholly-virtually (if permitted under the constitution) provided shareholders as a whole are given a reasonable opportunity to participate, ask questions and make comments. The NOM should therefore disclose sufficient information on how shareholders can participate at the AGM. Substantive resolutions must also be conducted by way of a poll at the AGM.
Important resolutions to consider
Common resolutions to consider for inclusion in a NOM include:
auditor election – this is particularly important where an auditor has been appointed to fill a casual vacancy throughout the year. The auditor will need to be elected at the AGM to ensure that the Company remains in compliance with Chapter 2M of theCorporations Act. Failing to do so can have serious implications;
granting financial benefits to related parties – ASIC expects these resolutions to provide sufficient information to enable shareholders to decide if the related party benefit is in the best interests of the company and must satisfy the requirements of Chapter 2E of the Corporations Act and ASIC Regulatory Guide 76;
director elections and re-elections;
approving the remuneration report and voting on a potential spill resolution (where applicable);
renewal of proportional takeover provisions if it has been three years since approval was last sought;
issues of securities and refreshing placement capacity;
adoption of new incentive plans– as a reminder, these need to be refreshed every three years to continue to rely on the Listing Rule exception for placement capacity; and
updates to the constitution.
Sending NOMs and meeting documents
NOMs and meeting related documents can be sent to shareholders either physically or electronically regardless of the format of the meeting unless a member has elected (within the required timeframe under the Corporations Act) to receive those materials in a preferred format. A company may provide the notice of meeting electronically by:
directly providing the person with the document via electronic means (i.e. via email); or
using electronic or traditional means to provide shareholders with sufficient details to allow them to access the document electronically (i.e. bysending an email with a link to download the document).
Early engagement with the share registry to ensure that dispatch of meeting materials occurs in accordance with member elections is key. We also remind companies of the requirement each financial year to notify shareholders of their right to make these elections (this can be done via the company’s website).