On 10 September 2021, the AICD lodged a further submission on the Government’s Exposure Draft Treasury Laws Amendment (Measures For Consultation) Bill 2021: Use of Technology For Meetings and Related Amendments (Exposure Draft).
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.
The AICD is very pleased to see the Government continuing to move forward on these important reforms. We also welcome the Government’s efforts to address much of the industry’s feedback on the previous iteration of the Exposure Draft Treasury Laws Amendment (Measures For A Later Sitting) Bill 2021: Use of Technology For Meetings and Related Amendments (Previous Exposure Draft).
There are however certain aspects of the revised Exposure Draft that we have concerns about. In summary, the AICD:
- strongly supports protection under the law that shareholders and members are given a reasonable opportunity, as a whole, to ask questions or make comments on the management of the company. However, to avoid creating an unnecessary compliance burden for smaller and not-for-profit organisations, the legislation should provide flexibility to allow organisations to provide the most appropriate method of communication with shareholders or members that reflects their organisational type, size and meeting format. This should not mandate that both oral and written channels be provided in all instances;
- supports amendments providing companies flexibility to decide whether votes are to be conducted via a show of hands or a poll. However, we do not consider that there should be a separate legislative requirement for listed entities to conduct votes on resolutions by way of a poll. In our view, recommendation 6.4 of the ASX Corporate Governance Principles and Recommendations (ASX Principles) already sets this expectation as to better practice for listed entities when conducting voting on substantive resolutions;
- strongly supports amendments to enable organisations to distribute meeting related materials electronically, while still enabling shareholders/members the ability to elect to receive hard copy materials. However, we consider that there is an opportunity to simplify the mechanics of the draft provisions in the Exposure Draft in line with similar existing provisions under the Corporation Act; and
- strongly supports amendments to enable the electronic execution of documents (including directors’ and members’ meeting minutes) on a permanent basis as well as further clarifications made to Division 1 of the revised Exposure Draft. We also in principle support amendments to enable agents to execute documents electronically under section 126 of the Corporations Act. However, we encourage further consultation on amendments to enable agents of a company to execute deeds electronically and the specific set of assumptions which are proposed to apply to dealings of this nature. For example, this could best occur via the package of legislative reform contemplated under the separate consultation on Modernising Business Communications across Treasury Portfolio Laws.
You can read a copy of our submission here.