ASIC recommendation

Increasing shareholder engagement in annual general meetings
By John Price, Commissioner, Australian Securities & Investment Commission

This article was submitted to AICD for publication in the Company Director magazine in August 2017

The ability of shareholders to hold the board to account is a fundamental principle of corporate governance. Effective engagement can enhance the long term performance and corporate value of a company for all shareholders. ASIC encourages companies to use every opportunity to engage with shareholders, including using technology to enhance shareholder engagement and participation.

The annual general meeting of a company is an opportunity for a board to communicate directly with its shareholders. It is the primary forum at which all of the company’s shareholders have the opportunity to meet with those entrusted with the company’s management to review the company’s operations for the past year and ask questions, make comments or have their say by voting on various matters. The information provided to shareholders as part of the annual general meeting is critical to their assessment of the company’s business strategies and future prospects.

ASIC strongly encourages directors to consider initiatives to increase shareholder engagement in annual general meetings. In particular, directors should consider how technology can be utilised to provide shareholders with greater accessibility to not only view presentations at these meetings, but also to ask questions and vote.

One option directors may wish to consider is holding a hybrid annual general meeting. This is an annual general meeting in which shareholders can participate (in terms of attending, voting and asking questions) from either a physical location at which the board is present, or by connecting electronically to that meeting from a remote location.

Companies in both Australia and a number of foreign jurisdictions are holding hybrid annual general meetings to increase shareholder engagement. These meetings give shareholders the ability to actively participate in the meeting without incurring the cost and inconvenience of travelling to the physical location of the meeting. Importantly, they also allow shareholders to physically attend the meeting and "eyeball the board" if they wish.

ASIC strongly supports the use of technology to enhance shareholder engagement and participation in annual general meetings, for example by holding a hybrid annual general meeting, provided that the introduction of any technological enhancements to the meeting does not detract from the ability of the company to comply with its obligations under the Corporations Act 2001.

Anyone from the company ever read this from ASIC. Come on GRR board. Lift your game.