In the wake of the COVID-19 outbreak and the growing concern regarding public gatherings, many organisations are now considering contingency plans for their AGMs. An important opportunity for investor engagement, and a legal requirement for many organisations, AGMs continue to play an important role in the Australian corporate landscape.

Across the globe we are already witnessing many governing bodies putting plans in place to curtail the spread of the virus. The Singapore, Shenzhen and Shanghai Stock Exchanges are offering extended reporting periods for companies and have encouraged them to hold virtual or hybrid meetings where possible. This trend is also gaining momentum in the U.S., with disclosure deadlines being extended for companies impacted by the virus and an uptake in of virtual and hybrid meetings.

Meanwhile in Australia, companies across the ASX300 are implementing business continuity plans, and events attracting 100 people or more have been banned by the government. On March 20, ASIC provided some much-needed relief for companies whose AGMs are impacted due to COVID-19.

The regulator is taking a “no-action” position for delayed AGMs that are due to be held by 31 May, granting companies a two-month extension. While the “no-action” approach is not a relief from regulatory requirements, it is confirmation that ASIC will not take enforcement action. ASIC also shared it will support the holding of AGMs using appropriate technology, thereby permitting hybrid or virtual meetings in the current environment pending individual constitutional conditions. 

The virtual AGM debate has raged for years, but organisations are still hesitant to take the leap toward online meeting options. Due to legislative uncertainty and the fear of the unknown, adoption has been slow, in Australia, with only a small number of companies choosing to even offer a hybrid meeting to investors.

Online meetings (both hybrid and virtual) provide several benefits for organisations. One of the most obvious issues that meetings technology has the potential to address is the problem of declining investor engagement.  Online meetings can assist companies to increase the percentage of voting investors by providing online solutions that enable investors to ask questions and vote regardless of their geographical location.
Overall in 2019, only 3.7% of investors voted*. It is interesting to note that more investors are choosing to vote digitally, with online voting options remaining the preference for many investors in 2019*.

Activist groups have long been lobbying for greater accessibility at AGMs, advocating for all investors to have the option to attend, regardless of their geographical location. An online meetings solution such as a hybrid or virtual AGM, has the potential to increase engagement and attendance.

Computershare Investor Services AU/NZ CEO, Ann Bowering states that,

“In our ever-changing global landscape, it’s important for organisations to have contingency plans in place to adequately manage unforeseen events, like the COVID-19 outbreak. Online meetings play an important part in that process, so we are working with our clients to ensure they can still meet their legislative requirements, and ensure their shareholders are safe and have a voice in these uncertain times.”

While in Australia the ability for listed companies to hold a solely virtual meeting has an element of uncertainty, hybrid meetings are permitted, although there are no specific provisions that directly address the technological advances in meeting options. Membership-based organisations are not impacted by this legislation and are permitted to hold fully virtual meetings if they wish.

The last time the Australian government addressed the virtual meetings debate was in 2012 when the Corporations and Markets Advisory Committee (CAMAC) was tasked with the project. A discussion paper was released, which tabled several questions around the relevance and format of AGMs in Australia. Public submissions were provided, of which Computershare was one, which considered advancements in meetings technology, but unfortunately the consultation failed to produce any official change.

Given online meetings are, in many other countries around the world, considered a more practical and inclusive solution, it may well be time for Australia to consider formal AGM reforms, especially in light of recent events surrounding COVID-19. The clear provision permitting solely virtual AGMs in Australian legislation would boost investor engagement and provide organisations with an alternative to physical AGMs during times of crisis.

If you have any questions about hybrid or virtual meetings, Computershare's team of meetings specialists can help.

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*2020 AGM Intelligence: The driving forces behind AGM outcomes, Computershare: