AGMs need to be reformed: survey
7 August 2012
Almost three quarters of listed companies believe that annual general meetings (AGMs) are in need of significant reform, according to a survey by law firm Allens.
The survey of a range of decision makers at Australian listed companies found broad support for significant changes to the way AGMs are conducted. The survey captured the views of a cross-section of Allens' listed clients, with large, medium and small-cap companies evenly represented.
Of those surveyed, 72 per cent either agreed or strongly agreed that significant reform of AGMs was needed. Respondents suggested that the Corporations and Markets Advisory Committee (CAMAC) conduct a cost/benefit analysis of the AGM, and a reassessment of its modern role and purpose, to determine whether it should be abolished or changed.
However, there was no clear consensus as to a preferred alternative to the current AGM structure. As one survey participant noted, the AGM 'is a nineteenth century activity but no one has yet found a sensible way of improving it'.
While 40 per cent of respondents favoured abolishing the AGM, 47 per cent did not.
A common theme to emerge from the survey was that the current one-size-fits-all approach needs greater flexibility, in order to make the AGM relevant to all types of companies. The survey also found that a clear majority (63 per cent) were in favour of regulating or restricting the use of proxy advisers in the AGM voting process, and 70 per cent agreed or strongly agreed that the recent 'two strikes' reforms should be abolished.
The survey was conducted in response to the review by CAMAC of AGMs in Australia. CAMAC is expected to publish a discussion paper on the topic by the end of 2012.
Allens Partner Greg Bosmans said it was important that Allens' clients had their views on these issues fed into CAMAC's review process as early as possible.
'CAMAC's review of the AGM will be crucial in tackling the issues that our listed clients say create challenges for effective shareholder engagement,' Mr Bosmans said.
'As one of our clients said in the survey, deciding on the role and purpose of the AGM will "drive all other issues".
'We and our clients look forward to engaging with CAMAC to define the place of the AGM in modern corporate Australia.'
A copy of the report can be downloaded at: http://www.allens.com.au/pubs/pdf/CAMACAllensListedClientSurveyReport.pdf.
- Susan CowenCorporate Affairs Adviser,
Ph: +61 3 9613 8374
Notes for editors.
Allens is a commercial law firm working throughout Australia and Asia. Through its integrated alliance with Linklaters it provides clients access to 36 offices in 27 countries around the world.