SYDNEY, Oct.20 (Reuters) – Australia plans to allow companies to ditch physical shareholder meetings and switch to fully online gatherings, making the rules introduced during the COVID-19 pandemic permanent.
A bill, which has been criticized by shareholder groups, was presented to parliament on Wednesday.
Under the new rules, companies will be able to hold online meetings if the company’s constitution expressly allows it “provided that the members, as a whole, have a reasonable opportunity to participate,” Treasurer Josh Frydenberg said in a statement.
In recent months, some companies have sought to modify their statutes to allow such a process. A resolution from pallet maker Brambles (BXB.AX), however, was withdrawn by the company after receiving little support from shareholders.
Rachel Waterhouse, chief executive of the Australian Shareholders Association, said the group was disappointed with the government’s move because online-only meetings can limit investors’ ability to hold executives to account.
“This allows executives and directors to avoid transparency and answer questions, potentially leaving retail shareholders uninformed of the true performance of the company and frustrated that directors have an impact on their oversight.” , she said.
The shareholder group believes that hybrid meetings should instead be the norm, as they allow for greater transparency, engagement and shareholder participation.
The proposed laws will also allow annual reports or links to these websites and other information to be emailed rather than printed and physically sent to shareholders.
The temporary measures were introduced in May 2020 as part of the government’s response to the coronavirus crisis and were then extended until March 31, 2022. If passed, the laws will be reviewed in two years to ensure that they work as intended, Frydenberg added. .
Reporting by Renju Jose and Paulina Duran; Editing by Richard Pullin and Edwina Gibbs
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