New rules to facilitate online AGMs

Treasurer Josh Frydenberg has announced new regulations designed to help public companies hold virtual shareholder meetings.

Changes announced today allow companies to convene meetings entirely online, rather than face to face.

Under the changes, company boards will be able to provide notice of annual general meetings via email and achieve a quorum with shareholders attending online.

Shareholders must have reasonable opportunity to participate, and will be able to put questions to board members and vote virtually.

Electronic signatures on online documents will also be able to prove the document has been validly executed. 

The new regulations will be in effect for six months from May 6 2020.

Australian Institute of Company Directors chief executive and managing director Angus Armour welcomed Mr Frydenberg's decision. 

"These are important measures to provide a means to maintain accountability and give certainty on practical governance issues during the pandemic," Mr Armour said. 

"The changes highlight the need for a wholesale review of outdated Corporations Act requirements post the COVID-19 period.

"The capacity for technology to improve accountability through visibility and accessibility, and to improve efficiency and manage costs at the same time has been demonstrated across the economy.

"Our regulations need to adapt to 21st century technologies to give companies the opportunity to engage with their shareholders across the community.

"Importantly, for those companies that choose to adopt a virtual component to their AGM, they can engage further with shareholders who may not be able to attend a physical meeting.”

The changes will be made under the instrument-making power that has been inserted into the Corporations Act 2001, as part of the government’s response to the COVID-19 crisis.

Woodside Petroleum and Iluka Resources are two Western Australian companies to have held virtual annual general meetings in recent weeks.