AGM SEASON 2024: ESSENTIAL CONSIDERATIONS FOR PUBLIC COMPANIES
With the 2024 AGM (Annual General Meeting) season under way for public companies with a financial year ending 30 June, it is important to ensure compliance with key regulatory requirements and careful attention to the legal and procedural developments is essential to ensure your AGM runs smoothly. The below high-level summary sets out issues which should be considered by Boards and management of public companies ahead of convening and holding their 2024 AGMs.
Background
With the 2024 AGM season under way for public companies with a financial year ending 30 June, it is important to ensure compliance with key regulatory requirements and careful attention to the legal and procedural developments is essential to ensure your AGM runs smoothly. The below high-level summary sets out issues which should be considered by Boards and management of public companies ahead of convening and holding their 2024 AGMs.
The importance of timing
Public companies which have a financial year ending 30 June must hold their AGM by no later than 30 November of each year. Although many companies have already locked in a proposed date for holding their AGM, they may not have commenced preparing the Notice of Meeting for the AGM (NOM). Action should be taken now to ensure compliance with the review and timing requirements for the NOM under the Corporations Act 2001 (Cth), the ASX Listing Rules, and the company’s own Constitution. This is amplified by the fact it is a busy period for boards, management, and regulatory bodies alike.
ASX, ASIC, and Notice of Meetings
As company secretaries are likely to be aware, a NOM which contains any resolution requiring shareholder approval for the purposes of the ASX Listing Rule resolutions must be submitted to ASX for review before the NOM is despatched to shareholders. ASX may take up to 5 business days to review the NOM and has discretion to extend this period for more complex NOMs or if a waiver from the ASX Listing Rules is required in connection with the NOM.
In many circumstances the company will also be required to submit its NOM to ASIC for review. This commonly arises, for example, where the NOM contains one or more resolutions seeking shareholder approval for a related party transaction under Chapter 2E of the Corporations Act. In those circumstances, the Corporations Act mandates that meeting materials (including the NOM) be lodged with ASIC at least 14 days before the NOM is despatched to shareholders (unless an abridged review period is approved). ASIC’s recent advice cautions companies to lodge meeting materials early, as requests for shortened review periods may not always be granted (particularly if less than 7 days’ notice is provided).
Preparing for shareholder engagement
Public companies should expect increased scrutiny from proxy advisers and shareholders, particularly on executive remuneration and ESG-related matters. In a climate of high interest rates and rising living costs, shareholders are likely to question boards on decisions around pay and governance. It’s essential for boards to have clear, well-communicated policies and be ready to respond to queries during the AGM.
Key AGM dates and deadlines
Companies should adhere to the following general timing when taking steps to convene their AGMs.
- AGM Date Announcement: Under Rule 3.13.1, notification to ASX at least 5 business days before director nominations close.
- Drafting the Notice: Allow at least 1 week, depending on the complexity of resolutions being considered at the AGM.
- Lodging with ASX: Submit your NOM for ASX review at least 5 business days before dispatch. Some resolutions may require longer review periods, especially if they involve waiver applications.
- Notice Period: Shareholders must receive at least 28 clear days’ notice of the AGM. If the NOM is being despatched to shareholders by post, additional time should be allocated to account for deemed delivery of the NOM to shareholders.
Conclusion
AGM season is a critical time for public companies, with significant regulatory obligations and shareholder expectations. By carefully planning your AGM, ensuring compliance with ASX and ASIC requirements, and staying ahead of key trends, your company can navigate the process smoothly and maintain strong relationships with stakeholders.
If you require any assistance or further information in respect of your AGM, please get in touch with Mark Burchnall, Taila Childs or Tyson Cleghorn by email to mburchnall@mphlawyers.com.au or tchilds@mphlawyers.com.au or tcleghorn@mphlawyers.com.au or on (08) 9221 0033.