AGM Resolution Checklist
Cowell Clarke has prepared a checklist of a number outlining key resolutions that public and listed companies may require, or may wish to consider, putting to shareholders at its AGM.
Please click on the link below to access the checklist.
Electronic despatch of notices
What you can do now?
With the consent of a shareholder, it is possible for companies to either:
- distribute the Notice of AGM to the shareholder electronically (such as fax or email); or
- utilise email or other electronic means to notify the shareholder that the Notice of AGM is available and direct them where to access the notice. However shareholders must have agreed to the means of notification (e.g. fax, email, SMS etc.) and the means by which they can then access the notice (such as at the company’s website).
Utilising electronic dissemination of the Notice of AGM has the potential to save a company money on both printing and postage.
Companies may wish to consider including a ‘Communication’s Preference Form’ in the mail out with this year’s Notice of AGM which asks shareholders to elect to take up e-communications.
What changes are coming?
The Government recognises the compliance burden associated with the current law, which requires companies to give notice of upcoming meetings in person or by post unless an individual shareholder elects to receive the notice electronically. In response, the Government has recently released a proposal paper on ‘Technology neutrality in distributing company meeting notices and material’. The paper puts forward a number of technology neutral proposals aimed at facilitating the provision of shareholder communications in a more usable electronic form in a timelier manner, through lower cost communication channels, and presented in a flexible manner that meets user preferences.
The proposal paper consultation period has closed and the Government has not yet released a response to the submissions received. However watch this space and we will keep you updated on any further developments towards technology neutrality for company meeting notices and material.
2016 AGM Pointers
ASIC has recently released some ‘pointers’ for the upcoming AGM season, a summary of which is set out below:
Realism and clarity in annual reports
ASIC has indicated its focus for 30 June 2016 reports will be on the realism and clarity of financial reports. This means that ASIC will be focusing on:
- Asset values: Companies need to adopt realistic asset values. Directors should consider the need to impair goodwill inventories and other assets and the bases of any impairment calculations. Fair values attributed to financial assets should also be based on appropriate models, assumptions and inputs.
- Accounting policy choices: Directors should consider how the choice of accounting policy can affect reported results. This includes treatment of off-balance sheet arrangements, revenue recognition, expensing of costs that should not be included in asset values, tax accounting and inventory pricing and rebates.
- Material disclosures: Clear and effective communication in financial reports is vital. There should be prominent disclosure of material information that assists users of financial reports, such as assumptions supporting accounting estimates, significant accounting policy choices and the impact of new reporting requirements.
ASIC acknowledges that, whilst not all directors are accounting experts, the expectation is that directors seek explanation and advice supporting the accounting treatments chosen and, where appropriate, challenge the accounting estimates and treatments applied in the financial report. Directors should particularly seek advice where the treatment does not reflect their understanding of the substance of the arrangement.
Risk disclosure
Does the operating and financial review (OFR) of your directors’ report include risk disclosures that you have carefully considered? For example, have you considered the appropriate disclosures about environmental, social and governance issues in your company? The OFR should include discussions about environmental and other sustainability risks if those risks could affect your company’s achievement of its financial performance or outcomes disclosed, taking into account the nature, business and strategy of the company.
Voting on a poll vs show of hands
Company chairs need to carefully consider whether a poll should be called for voting, particularly in respect of remuneration resolutions. ASIC notes that it has received reports of companies voting on resolutions to adopt the remuneration report by way of a show of hands rather than by poll where proxies received prior to the vote indicated that a strike may be received.
ASIC’s view is that companies should adopt a poll on all resolutions as a matter of course and good corporate governance. Polls more democratically reflect the principle of “one share one vote” and the wishes of not just those attending the meeting, but also those who have voted by proxy.
Continuous disclosure – earnings guidance revisions
Listed companies are reminded about their ASX listing rule continuous disclosure obligations and timing of earning guidance revisions. Revised earnings guidance announcements should not be delayed until the AGM simply because it provides a convenient forum to make the announcement.
Cowell Clarke fixed fee review
Cowell Clarke can review your company’s notice of meeting materials for a fixed fee.
Please contact us if you would like further information or assistance in preparing for the 2016 AGM season.