By Patrick Durkin
Veteran fund manager Geoff Wilson has launched a fresh campaign to save the physical annual general meeting, as federal Labor considers making permanent emergency changes made during the pandemic.
Mr Wilson, the fund manager who helped the Coalition retain government in 2019 by marshalling 90,000 investors against Labor’s franking credits refund policy, will now turn his army – which has grown to 130,000, representing more than $5 billion – against federal Labor’s review considering changes which could make virtual annual general meetings permanent.
Mr Wilson, the founder of the Wilson Asset Management empire of listed investment companies, has already fought off the move once, when the Coalition government tried in 2020, labelling it “undemocratic and grossly unfair to millions of Australian retail investors”.
“It’s on again,” Mr Wilson told The Australian Financial Review.
“We fought it off last time and beat the Liberals. Let’s see if Labor is any better. The big end of town is trying to take away the rights of mum and dad investors as shareholders.”
Mr Wilson said a hybrid AGM had become the “gold standard”, and his submission urges the government to reverse the amendment which allows companies to hold virtual-only meetings.
“We believe this change has shifted the balance of power away from shareholders, particularly retail shareholders, by eroding transparency, accountability and access,” his submission says.
Assistant Treasurer Stephen Jones this month announced the review to consider making temporary measures introduced by former treasurer Josh Frydenberg to allow hybrid and even virtual-only AGMs permanent. Other changes were the ability to execute company documents and send meeting-related materials online.
Submissions in response to the government review closed on Friday, and business groups are pushing to allow listed companies to hold virtual-only AGMs.
“Wholly virtual meetings have been convened by very few ASX-listed companies since the COVID-19 pandemic despite a high level of interest in doing so,” the Australian Institute of Company Directors says in its submission.
A number of proxy advisers and institutional investors have already signalled they will oppose such resolutions. The Australian Council of Superannuation Investors, which represents 37 of the country’s biggest super funds, fund manager Sandon Capital and proxy firm ISS are among those that have previously expressed concern.
A number of top companies including Newcrest Mining, Dexus and Brambles withdrew their resolutions to change their constitution to have a virtual-only AGM, once they realised the resolutions would not pass the vote. Others including Ansell, Bapcor, Vicinity Centres and Kogan.com had the same motions defeated.
‘Stifling criticism’
The AICD and other business groups are pushing the government-backed review, led by a three-person panel of former judge Dr Robert Austin, governance academic Helen Bird and Stockbrokers and Investment Advisers Association chief Judith Fox, to drop a constitutional requirement that requires 75 per cent shareholder support for AGMs to be conducted online only.
“We strongly encourage the review panel to consider a recommendation to remove the requirement under … the Corporations Act for a company’s constitution to require or expressly permit wholly virtual meetings,” the AICD argues in its submission.
“Of course, having a wholly virtual meeting should not be used as a way of stifling criticism or reducing accountability of the board and management,” it adds.
“If the review panel recommends retaining a shareholder approval mechanism in the legislation, an alternative approach would be to impose a requirement for an ordinary resolution (which requires 50 per cent support), instead of a special resolution.”
The AICD strongly opposes any move to require companies to hold a “hybrid” meeting – providing physical and virtual access – because of the high costs. One large ASX-listed company noted that convening a hybrid meeting had doubled the cost of the AGM because of the technical infrastructure required, the AICD says.
“The legislation should not impose minimum expectations that are overly prescriptive, unduly burdensome or expensive to comply with, or otherwise at risk of becoming outdated as technology continues to evolve,” the AICD says.
Mr Wilson responded: “Maybe they need to reduce their directors’ fees a little bit more.”
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