The annual general meeting (AGM) season for companies with a financial year-end of 30 June is fast approaching. To help listed companies prepare for their AGM, we have summarised below some key legal and regulatory updates and reminders.
Please contact our team if you would like assistance preparing your notice of AGM or are seeking advice regarding your AGM.
1. Latest date for holding your AGM
A listed company’s notice of AGM, accompanying explanatory memorandum and proxy form (Meeting Materials) must be prepared and made available to shareholders with sufficient time to hold the AGM by no later than 5 months after their financial year end (ie by Thursday, 30 November 2023).
We recommend you start preparing your Meeting Materials now, with the aim of having a final draft by no later than the end of September.
2. Providing Meeting Materials to members
- Notice of access: Companies are no longer required to send the written Meeting Materials in full to all shareholders. The Corporations Act now permits companies to instead provide shareholders with notice of how to access the document electronically, rather than sending the Meeting Materials in full.
- Right to elect method of document access: At least once each financial year, companies must send a notice to shareholders informing them of their right to elect to receive documents electronically, in physical form, or not at all, as well as the right to make ad hoc requests for documents to be provided in a particular way. Alternatively, companies may make such a notice readily available on their website. For companies who have not made such a notice available on their website, it may be appropriate to include the necessary notice in the Meeting Materials sent to shareholders.
3. Virtual Meetings
- Holding Meetings: Subject to any limitations under a company’s constitution, companies may now hold their AGMs either:
- at a physical venue;
- by solely virtual means, provided this is permitted by the company’s constitution; or
- as a “hybrid” physical and virtual meeting.
- Shareholder participation: Companies must ensure that their shareholders have a reasonable opportunity to participate in the AGM irrespective of how it is conducted. Where AGMs are held wholly or partially via virtual means, the technology must permit shareholders to exercise their right to ask questions and make comments, both orally in real time, and in writing.
4. Key steps
An overview of the key steps for the AGM for listed entities is below.
| Step | Requirement | Timing |
| 1 | Preparation of Meeting Materials | ~1-3 weeks, depending on the resolutions required |
| 2 | Announce the date of the AGM and closing date for receipt of nominations from persons wishing to be considered for election as a director | At least 5 business days before the closing date for the receipt of such nominations |
| 3 | Lodgement of Meeting Materials with ASX (if required)1 | Up to 5 business days |
| 4 | Lodgement of final Meeting Materials with ASIC (if required)2 | Up to 14 days, subject to any abridgement |
| 5 | Meeting Materials announced on ASX and dispatched to shareholders3 | Generally 2 – 3 days |
| 6 | Time and date for determining eligibility to vote at the AGM | Not more than 48 hours before commencement of the AGM |
| 7 | Cut-off date for receipt of proxy forms | Not less than 48 hours before commencement of the AGM |
| 8 | Announcement of any prepared announcement, including any prepared address by the chairperson, that will be delivered at the AGM | No later than the start of the AGM |
| 9 | Announcement of results of AGM4 | Immediately following the AGM |
| 10 | Attend to any post-AGM lodgement requirements with ASIC and/or ASX | Depends on resolutions approved |
Notes:
- Draft notices of general meeting that contain resolutions for Listing Rules purposes must be submitted to ASX for review before they are sent to shareholders. ASX may extend the 5 business day deadline further time is required for the review. If waivers from any Listing Rules are required in connection with the notice of AGM, additional time must be allowed.
- Meeting Materials will require lodgement with ASIC if approvals are sought under Chapter 2E of the Corporations Act for related party benefits. Final, signed Meeting Materials must be lodged with ASIC, not draft documents. This means the ASX review process must be complete before the Meeting Materials are lodged with ASIC.
- Each company’s constitution should provide when the Meeting Materials are deemed to be received.
- Pro forma notification templates to announce meeting results are available from ASX here.
5. Potential resolutions
We have summarised below a number of common resolutions which you may wish to consider for this year’s AGM:
| Auditor election | If a new auditor was appointed during the year, that auditor must be elected at the company’s next AGM. Any newly incorporated entities will similarly need to elect their auditor at their first AGM. |
| Two strikes resolution | Consider whether a specific resolution is required for a “two strikes” resolution – this will be necessary if more than 25% of the eligible votes cast were against the remuneration report at last year’s AGM. |
| Approve or renew employee share schemes
|
Employee share schemes must be approved by shareholders every 3 years in order for issues of securities made under those schemes not to be counted towards the company’s 15% placement capacity under Listing Rule 7.1. Companies must specify the maximum number of securities proposed to be issued under the relevant scheme over the 3 years following approval.
It is also important to consider whether approval ought to be sought under section 200B of the Corporations Act, to ensure that any accelerated vesting of performance securities does not result in a termination benefit prohibited by the Corporations Act. The legislative regime governing employee share schemes changed with effect from 1 October 2022. Companies should review their existing policies and offer documentation to ensure that any necessary amendments are accommodated. It may be necessary to adopt a new or materially amended employee share scheme, which requires shareholder approval. |
| Replace or amend constitution | Consider whether the constitution ought to be amended to address recent updates to the Corporations Act, namely:
|
| Proportional takeovers resolution
|
If there is a provision in the company’s constitution regarding proportional takeovers, this must be renewed every 3 years by special resolution (ie 75% majority of votes cast). A proportional takeovers provision allows a company to refuse to register a transfer in relation to a proportional takeover bid (i.e. a bid where the bidder seeks a certain percentage of each shareholder’s parcel) until such time as the bid is considered by shareholders. |
| Re-election of directors | Consider whether any directors appointed to fill a casual vacancy are required to be elected by shareholders and which directors are required to be re-elected by rotation. |
| Increase non-executive director fee pool | Consider the current maximum total aggregate amount of fees payable to non-executive directors and whether this amount needs to be increased – if it does, shareholder approval is required. |
| Issue securities to directors
|
Consider whether any securities are to be issued to directors or their associates, in which case, prior shareholder approval will be required. Depending on the nature of the issue, it may be necessary to obtain approvals under Chapter 2E of the Corporations Act, as well as under the Listing Rules. |
| Ratify previous security issues
|
Consider seeking shareholder approval to ratify any securities issued during the previous 12 months without shareholder approval. Shareholder approval will “refresh” the company’s placement capacity under Listing Rule 7.1 by allowing the company to issue up to its full 15% placement capacity during the 12 months from the date of the AGM. Ratification can also be sought for issues made under the expanded 10% placement capacity under Listing Rule 7.1A. |
| Approve 10% placement facility
|
Companies which have a market capitalisation of $300 million or less and are not included in the S&P/ASX300 Index can seek shareholder approval to issue an additional 10% of their issued capital over a 12-month period pursuant to Listing Rule 7.1A. This approval must be sought at each AGM for issues for the following year. Details of all securities issued since last approval must be included, even if they have already been ratified or were issued with shareholder approval. |
| Consolidate securities | Consider the company’s capital structure and whether it is appropriate to undertake a share consolidation. |
6. Withdrawal of resolutions
Entities are reminded that if it is determined to withdraw a resolution, under Listing Rule 3.13.2, the entity must announce on ASX a short description of the resolution, the fact that it was not put to the meeting and an explanation of why it was not put to the meeting.
For more information, please contact Deanna Carpenter, Jeremy Newman and Shaun Hardcastle.
