The 2024 AGM season was notable for several reasons:

• The increase in experimentation surrounding virtual, hybrid, hybrid and physical AGM formats
• The potential softening in questions relating to sustainability and environmental issues (particularly given the legislative reform around climate change and sustainability reporting) and an increase in focus on social and governance issues
• A potential shift in shareholder activism moving from requisitioned resolutions to protest votes for director re-elections
• An increased focus on remuneration, including alignment with ESG goals and general stakeholder value.

Similar to the 2023 AGM season, stakeholder engagement, particularly engagement with proxy advisors, in the lead up to meetings proved critical for some companies, with Boards and Management focused on meaningful engagement and garnering support for remuneration decisions and director re-elections.

The 2024 AGM season potentially saw some softening in public shareholder activism and requisitioned resolutions. However, we observed an increase in alignment between broader stakeholder interests, remuneration and social governance goals; possibly influenced by broader corporate governance challenges and declining economic conditions affecting company performance and, in some circumstances, strong shareholder agitation an feedback to the Board prior to the meeting an more “behind the scenes”.

Technology at AGMs

The pandemic resulted in long term changes to the way in which AGMs could be held, allowing companies to use technology in various ways to interact with their shareholders and broader stakeholder base. However, there continues to be certain stakeholder resistance to fully virtual meetings and constitutional changes proposed by companies to allow fully virtual AGMs under the Corporations Act 2001 (Cth) (Corporations Act).

As a result, fully virtual meetings continue to be limited, mainly adopted by companies incorporated offshore. Companies instead continue to experiment with in person, fully virtual and hybrid formats with a number of companies holding “physical” meetings with the ability to view the meeting virtually.

The considerable benefits of technology remain for both issuers (generally resulting in lower costs and being environmentally conscious) and members (greater engagement, accessibility and flexibility and a wider reach). This may include, for example, options such as a physical only meeting with the inclusion of a live webcast of the meeting so that shareholders can view and hear proceedings online, however, are unable to vote or ask questions online.

It should be noted that under the Corporations Act, this format of meeting would be regarded as an “in person” meeting given that the online option does not permit members to have a reasonable opportunity to “participate” by asking questions or voting online.

With ongoing regulatory and legislative changes regarding technology, particularly laws regarding AI, privacy and cybersecurity, companies are increasingly more aware of the corporate governance challenges in using technology to facilitate and increase stakeholder participation and engagement and the importance of having robust processes and systems in place.

Focus at AGMs

Generally, there was a continued focus on matters that have been prevalent for some time, including:

• remuneration matters particularly where Boards have used their discretion to allow vesting where shareholder value is not aligned – consistent with historical trends, we also observed the remuneration report being used as a tool by shareholders to express their dissatisfaction regarding the performance of the company in general, not necessarily linked to the company’s remuneration practices
• ESG – we observed an increase in questions relating to ESG targets, linked to long term incentives for executive remuneration particularly focused on the testing process and the rigour around the testing. This was particularly evident with those companies which are required to begin Climate and Sustainability reporting in 2026
• director re-elections – we observed a number of meetings with very high “against” votes against these resolutions.

Shareholder questions at meetings on macro-economic, climate and sustainability reporting have become less prominent for some companies, and we have noticed a shift back to company-specific questions including operational strategy, strategic projects, adequacy of cyber security and approach to AI and director performance.

An interesting trend we have also observed is a focus on directors’ time commitments, particularly those who proxy advisors consider are “overboarded” (for example, sitting on 5 or more public company boards) and on director performance including general board skills and performance on their other boards. There has been a rise in protest votes against director re-elections for their performance on their other boards, particularly in relation to overall corporate culture and governance concerns, with some high-profile examples in the 2024 AGM season.

Remuneration

Voting on remuneration reports will continue to be a focus for shareholders. Rather than being used to express shareholder dissent, the remuneration report is being used to pose questions around alignment of shareholder interests with remuneration outcomes and the company’s social licence to operate.

Monitoring the trend of shareholder experience and engagement will need to be carefully considered by Boards well before the next AGM season begins, particularly with the potential introduction of the 5th edition of the ASX Corporate Governance Council’s, Corporate Governance Principles and Recommendations and a broader focus being proposed on stakeholder (rather than simply shareholder) interests. Broad stakeholder engagement in the lead up to meetings will be critical for some companies; and Boards and Management should focus on garnering general stakeholder support “behind the scenes.”

Looking ahead

The final report of the Panel conducting the Statutory Review of the Meetings and Documents Amendments (Statutory Review) was received by the Assistant Treasurer and Minister for Financial Services on 14 August 2024. The report was tabled in both houses of Parliament on 9 September 2024.

The Statutory Review assessed the effectiveness of amendments made in 2021 and 2022 to provide for a technology-neutral approach to company meetings, and to the electronic communication, signing and execution of documents.

The amendments considered by the Panel were made to the Corporations Act in 2021 and 2022 to provide for virtual company meetings and the electronic distribution, signing and execution of company documents.

In short, the Panel made 11 Recommendations and a number of findings in the final report. Please refer to the final report for further details: https://treasury.gov.au/publication/p2024-575418Opens in new window

On 4 February 2025, the Government released its response to the Statutory Review, agreeing or agreeing “in principle” to all Recommendations: https://treasury.gov.au/publication/p2025-625388Opens in new window

Key recommendations to note are Recommendation 1 and Recommendation 2, that:

• listed entities: no legislative change be made in relation to the meeting formats available for listed public companies and listed registered schemes. That is that listed public companies and listed registered schemes should be allowed to hold a wholly virtual meeting only if this is permitted by their constitution; and
• non-listed entities: proprietary companies, unlisted public companies, unlisted registered schemes, not-for-profits and companies limited by guarantee, should be permitted to determine the appropriate meeting format – that there should be no statutory requirement of constitutional permission before a wholly virtual meeting may be held.