AICD submission on permanent reforms to enable virtual AGMs, electronic communications and electronic signatures

Building on the Treasurer’s temporary relief put in place during the COVID-19 pandemic, the Exposure Draft seeks to make permanent amendments to the Corporations Act 2001 (Cth) (Corporations Act) to enable companies to hold virtual meetings, such as annual general meetings (AGM), distribute related meeting materials electronically and execute documents electronically.

Since the onset of the COVID-19 pandemic, through what continues to be an uncertain time across the Australian community, the AICD has been advocating for urgent regulatory relief required to support organisations to continue to meet their governance requirements while navigating the impact of public health measures.

The disruption caused by the COVID-19 crisis has highlighted the need to permanently modernise Australia’s Corporations Act requirements.

In summary, the AICD:

• strongly supports proposed reforms to enable organisations to adopt the best meeting format for their circumstances, whether that be physical, hybrid or wholly virtual meetings, on a permanent basis;
• considers it is critically important that the legislation provides flexibility in delivery and not be overly prescriptive creating an unnecessary compliance burden for smaller and not-for-profit organisations, given the risk of legislation becoming outdated as technology evolves;
• supports the Exposure Draft’s proposed amendments to enable organisations to distribute meeting related materials electronically, while still enabling shareholders/members the ability to elect to receive hard copy materials on an ‘opt in’ basis;
• urges the Government to consider extending the COVID-19 temporary relief measures, proposed in Treasury Laws Amendment (2021 Measures No.1) Bill 2021 (TLAB1), to continue until the end of the 2021 calendar year. Given the ongoing disruptions in the Australian community due to the COVID-19 pandemic, this will provide some certainty for the upcoming 2021 AGM season;
• encourages the Government to consider a permanent mechanism in the Exposure Draft legislation to enable emergency relief measures to be in put place in the event of future disruptions, such as via a disallowable legislative instrument or ASIC class action relief power; and
• strongly supports proposals to enable the electronic execution of documents (including directors’ and members’ meeting minutes) on a permanent basis.