Key takeaways

Company secretaries and directors should be aware of the key processes and timing considerations when preparing for the upcoming annual general meeting (AGM) season.

Where a company’s AGM materials are extensive or complex, secretaries and directors should ensure they prepare and,  where applicable, submit for ASX and/or ASIC review, the AGM materials well in advance of the final date for sending materials to shareholders.

This paper highlights some of the critical timing considerations, as well as common AGM resolutions, which your company may wish to consider when preparing for its next AGM.

Background

Australian public companies are required to hold an AGM at least once in each calendar year and within five months after the end of their financial year. The majority of ASX-listed public companies operate on a 30 June financial year end date, requiring those companies to hold their AGM by 30 November each year.

Whilst the role of the AGM has been the subject of discussion and debate over recent years, it remains an important event to be undertaken by a company each year and provides a forum for shareholder engagement, and for companies to seek shareholder approvals which will facilitate the ongoing operation and functionality of their corporate activities.

This document highlights some of the matters that company secretaries and directors of Australian public companies should consider and be aware of as they prepare for the upcoming AGM season.

AGM Materials

In order to call and hold an AGM, companies will need to prepare and send to shareholders a Notice of Meeting (including the accompanying Explanatory Memorandum and Proxy Form) (AGM Materials). AGM Materials must be prepared and given to shareholders in accordance with the Corporations Act 2001 (Cth), ASX Listing Rules, and the constitution of the company.

A public listed company must give shareholders at least 28 days’ notice of any general meeting, including the AGM. When preparing for an AGM, companies will need to take into account the time required to:

  • draft the AGM Materials;
  • have the AGM Materials reviewed by ASX (to the extent required, which will be determined based on the matters to be considered by shareholders at the AGM), noting that ASX may take five business days to conduct its review;
  • have the AGM Materials reviewed by ASIC (to the extent required, which will be determined based on the matters to be considered by shareholders at the AGM), noting that ASIC may take 14 days to conduct its review; and
  • print and send the AGM Materials to shareholders. 
  • Companies will also need to carefully consider when the AGM

Materials are deemed to have been provided to or received by shareholders under their constitution, which in practice may require companies to send their AGM Materials to shareholders more than 28 days prior to the AGM date.

Each year, throughout October, ASX and ASIC receive a large volume of AGM Materials for review (often with requests that ASX and ASIC abridge their permitted review period). ASX and ASIC are generally reluctant to abridge their permitted review period on the basis that a company requires an accelerated review of its AGM Materials in order to meet its minimum notice requirements. Consequently, we recommend that companies plan for their AGM and prepare their AGM Materials well in advance of the last permissible date for sending their AGM Materials to shareholders. This is particularly important if there are a number of resolutions being put to shareholders or complex transactions that are to be considered at the AGM.

If you will require ASX waivers from any ASX Listing Rules in connection with your AGM Materials, additional time should be allowed to obtain the waiver as the five business day period referred to above does not include the time needed to obtain a waiver.

Business to be Conducted at an AGM

The ordinary business of an AGM may include:

  • consideration of the annual financial report, directors’ report and auditor’s report;
  • election of directors;
  • appointment of auditor; and
  • fixing of auditor remuneration,

even if such matter is not referred to in the AGM Matrials.

ASX-listed companies must put to their shareholders a non-binding resolution to adopt the company’s remuneration report at the AGM.

In addition to the ordinary business contemplated above, there are a significant number of other resolutions which companies may consider putting to shareholders at their AGM, including the following more common resolutions:

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Conclusion

The AGM is an important event on each company’s corporate calendar. Not only does the AGM provide a forum for shareholder engagement, it gives companies an opportunity to procure important shareholder approvals for their corporate activities in the upcoming year. A well planned AGM may also serve to avoid the time and expense of calling extraordinary general meetings (being shareholder meetings held in addition to the AGM) to procure shareholder approvals that could have been sought at the AGM.