Online AGMs get official go-ahead

Josh Fydenberg has given the formal go-ahead for companies to hold virtual annual general meetings amid the COVID-19 crisis.

Federal Treasurer Josh Frydenberg. Picture: AAP

Josh Fydenberg has given the formal go-ahead for companies to hold virtual annual general meetings amid the COVID-19 crisis, as companies such as AMP line up to address shareholders online.

In a statement released on Tuesday, the federal Treasurer said he would be using new temporary powers inserted into the Corporations Act to allow companies to hold annual meetings online, and allow them to achieve a quorum with shareholders attending online.

The move, which will apply for the six months from May 6, relieves companies from potential legal action under the Corporations Act for holding virtual AGMs. The virus crisis has prompted some firms to consider delaying AGMs because of social distancing pressures.

But others such as AMP, QBE, Rio Tinto and Coca-Cola have been keen to hold the meetings, using a combination of a webcast and having some shareholders in a room to meet the requirements of the Corporations Act. Woodside held its virtual AGM last month.

Written in 2001, before the rise of the internet, the Act requires that AGMs be held with physical meetings of shareholders.

Announcing the temporary changes, Mr Frydenberg said online meetings “must continue to provide shareholders with a reasonable opportunity to participate”. “As a result, shareholders will be able to put questions to board members online and vote online,” he said.

The changes will also allow company officers to sign a document electronically. Previously signatories were required to sign the same physical document.

Computershare’s chief executive of issuer services for Australia, Ann Bowering, said the decision would give “certainty” to companies as they planned their AGM during the current COVID-19 crisis.

Ian Matheson, chief executive of the Australasian Investor Relations Association, said the changes would “allow companies to engage with shareholders directly and cost effectively over the next six months”.