The ASA reckons retail shareholders don’t get enough info to vote smartly at meetings
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The Australian Shareholders’ Association, the country’s largest independent, non-profit, individual investor association, is fighting to force companies to reveal more information about would-be directors ahead of shareholder votes.
The ASA says retail shareholders — individual, non-professional, mum-and-dad investors — often find there is “insufficient information” on which to base their vote either in favour or against the election of a company director.
Such voting takes place at least once a calendar year at a company’s annual general meeting (AGM), but can also be held at an extraordinary general meeting (EGM), which are non-regular meetings usually called when a bloc of antsy shareholders holding 5 per cent of more of a company’s stock call for a general meeting under section 249D of the Corporations Act.
Australian Whisky Holdings (ASX:AWY) and Pacific Dairies (ASX:PDF) are two companies that have recently faced calls from antagonistic shareholders regarding their board composition. The small cap mining sector has been rife with shareholder activism of late.
The ASA, in announcing its areas of focus for the remainder of 2019, said it was increasing scrutiny on board composition and director skills.
“Retail shareholders take the responsibility of voting for director elections seriously, but often feel there is insufficient information on which to base their voting determination,” it said.
“We are seeking a consistent standard of information to be included in the annual report, company website and notice of meeting.”
It argues that when a director — whether up for re-election or new – is proposed, a notice of meeting should include the “detailed skills the director brings to the board of the company at that time, and how those skills meet the requirements of the board in the coming years”.
The ASA also argues for an independent chairman, a majority of independent directors and only one executive director, with both females and males to make up at least 30 per cent of a company’s board.
The body has also called for: