AGM season 2022 is almost here – what should you be thinking about?

By Michelle Eastwell, Vanessa Murphy and Chris Wright

The 2022 AGM season is coming up fast. We have set out below a list of quick reminders of topics to be considered when planning for this years’ AGM and preparing the AGM notice. The list includes new requirements to be aware of, reminders on timing and future considerations to be as well prepared as possible for this years’ AGM.

We have set out a number of key matters and dot points to help you prepare for your upcoming AGM.

Timing

• A company’s AGM must be held within five months of the end of its financial year (so by 30 November for companies with a 30 June financial year end). ASIC had provided extensions to this time frame with ‘No Action’ positions during COVID, however these extensions no longer apply.

Announce the date of the AGM and closing date for director nominations

• A listed entity must announce the date of its AGM and the closing date for director nominations via ASX at least five business days before the closing date for receipt of nominations for the election of directors. This requirement is often overlooked.
• This can be done by giving ASX a ‘corporate calendar’ which sets out these dates, as well as any other key dates the company wishes to include.
• This announcement should be made when the time and plan for the AGM is finalised and is separate (and prior) to the release of the full notice of the AGM.

Meeting format

• Companies wishing to hold an entirely virtual meeting may only do so if this is permitted by their constitution (or if specific ASIC relief is obtained). The temporary relief introduced last year that overrode any constitutional limitations regarding virtual meetings has now expired. If you don’t currently have such an ability under your constitution, it may be worth considering using the AGM as an opportunity to amend your constitution to allow for this.
• Members must be provided with a ‘reasonable opportunity to participate’ in the AGM. This means holding the AGM at a reasonable time and if held utilising technology, that technology must be reasonable and allow for members to make comments or ask questions, both verbally and written.

Check for any required resolutions

In addition to the usual AGM resolutions (remuneration report and director rotations and elections), remember that:

• if a strike was received against the remuneration report at last year’s AGM (ie 25% or more voted ‘no’), you need to be prepared for a spill resolution in the event that a second strike is received;
• if it has been three years since your employee equity plan(s) and/or proportional takeover provisions were renewed, these should be renewed again – also, be aware that where amendments have been made to the terms of your company’s employee equity plans, this may result in shareholder approval being required notwithstanding it’s been less than three years since they were last approved;
• if you have issued equity securities during the past 12 months, these should be considered for ratification to preserve placement capacity under Listing Rules 7.1 and 7.1A; and
• for companies with a market capitalisation of less than $300 million or who are not in the S&P/ASX300 Index, you should consider seeking approval under Listing Rule 7.1A for an additional 10% placement capacity.

Polls

• Listed companies can no longer vote on certain resolutions by show of hands. A vote must be conducted by way of a poll for resolutions set out in the notice of meeting, resolutions required by members (see section 249O of the Corporations Act 2001 (Cth)) or resolutions where a poll is demanded. Your constitution cannot override this requirement.
• Be aware that members with 5% of the votes that may be cast at the meeting may request that the company appoint an independent person to observe the taking of the poll and prepare a report on the conduct of the poll. In addition, members with 5% of the vote that may be cast at the meeting may appoint an independent person to scrutinise the outcome of the poll and prepare a report. Your legal advisors and share registry should be your first point of contact if you receive such a request.

Confirm who can vote

• Careful consideration should be given to who can vote on each resolution proposed at the AGM. Mandatory voting exclusions will apply to some resolutions (ie in relation to management remuneration) and steps will need to be implemented to ensure the voting exclusions are complied with.

ESG considerations

• Increased demand from both shareholders and customers for sustainability is prompting developments in disclosure requirements (see our recent commentary on ESG). Be prepared for questions on the company’s approach to ESG from your members.
• In June, ASIC released an information sheet (INFO 271) on ‘How to avoid greenwashing when offering or promoting sustainability related products’. In addition to existing disclosure obligations, ASIC recommended following the TCFD (Task force on Climate-related Financial Disclosures) framework when making voluntary disclosures. ASIC indicated that following the TCFD framework would well place companies for a transition into a future standard. See our commentary on ASIC’s guidance on how to avoid greenwashing.

Delivery of AGM notices

Following welcome amendments earlier this year to modernise the meeting provisions of the Corporations Act, companies and registered schemes can now send notices of meeting to members:

• in a physical form;
• through physical notice or an electronic notice that allows for electronic access to the document;
• by sending the document itself electronically; or
• in respect of annual financial reports only, making it available on a website.

However, members are entitled to make an election as to their preferred means of receipt, either on a standing basis or through ad hoc requests relating to particular documents. Companies will need to be particularly mindful of these elections, and make provision for members to indicate their preferences, as a failure to comply with a member’s election will result in the commission of a strict liability offence.

Hall & Wilcox has extensive experience advising listed and unlisted companies on all aspects of their AGMs, including virtual and hybrid meetings. If you require any assistance with the holding of your AGM, please contact us.