Shareholder resolutions: Is there a case for change?

Summary

In recent years there has been increase in Australia and overseas in the number of shareholders seeking to put resolutions to Annual General Meetings on a range of issues — many of which relate to environmental, social and governance (ESG) matters. Governance Institute partnered with global knowledge provider LexiNexis to host a roundtable of key industry stakeholders to determine if in fact there is a case for change. This was in response to the Australian Council of Superannuation Investors paper Shareholder resolutions in Australia, Is there a better way? The roundtable discussion confirmed that there is currently no consensus as to whether reform of the current framework for shareholder resolutions is required, or if required, what form should this should take.

Following the Roundtable and a survey of members Governance Institute of Australia released a Green Paper Shareholder resolutions: Is there a case for change? and called for submissions in a bid to break the deadlock. Responses to the Green Paper indicated that views were fairly evenly divided views on the questions of: whether there is a need for change, whether shareholders should have a stronger voice on ESG issues and whether shareholders should be able to bring these resolutions without the need for a constitutional amendment. There was more support for extending the current time frame to give companies more time to respond. There was quite strong support for introducing thresholds requiring requisitioning shareholders to hold shares for a minimum period of time and thresholds requiring requisitioning shareholders to hold a minimum shareholding.

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