At this time of year, ASX-listed companies with a June year end will be turning their minds to AGM preparation. Here is a countdown of key actions to ensure a successful launch.

10 - Have you announced your AGM?

A listed entity must announce the date of its AGM via ASX at least five business days before the closing date for receipt of nominations for the election of directors. An entity must normally accept those nominations up to 35 business days before the AGM.

It is important to understand the distinction between this brief announcement to the market and the Notice of Meeting (discussed in more detail in #4 below).

9 - Are you communicating with key stakeholders ahead of time?

Allow time to 'check in' with key shareholders and proxy advisers, particularly to sound them out on sensitive issues such as remuneration, issues of shares or options to directors and Board composition.

8 - Do you know what's on the agenda?

Consider all the possible items of business so you allow time to draft explanatory notes and consult with ASX if necessary, for example:

  • If there was a 'strike' against your remuneration report last year, you will need to comment on how you responded to any questions on remuneration from the last AGM, as well as allow for a spill resolution if there is a second strike this year.
  • You may wish to obtain ratification of allotments of shares not previously approved by shareholders (in order to 'refresh' your placement capacity).
  • You may require shareholder approval in order to implement proposed share or option issues to directors.

7 - How many Board vacancies are there?

The Board cannot set the number of directors below the maximum board size in the Constitution without member approval. For example, if the incumbent board is five directors but the Constitution allows for a maximum of ten directors, the Board will need an ordinary resolution to support the Board's recommendation to remain at five directors.

This is relevant where shareholders have nominated director candidates in addition to the Board’s nominees. As you will only know the result on the floor of the meeting, you will need to plan for the two scenarios – limiting the Board size or not.

6 - Do you need to revisit the NED remuneration pool?

An increase to the maximum aggregate remuneration of non-executive directors requires shareholder approval by ordinary resolution. The cap on the remuneration of the NED pool should be considered before the AGM, particularly if the Board is growing. The Remuneration Committee may wish to seek external validation of the new cap, and it may be a topic of conversation with key stakeholders.

5 - Does a three year approval cycle apply?

Some matters have a three year approval cycle. That is, they must be approved at every third AGM in order to remain effective. The matters that operate on this three year cycle are: 

  • Confirming that issues under an employee share, option or performance rights plan are an exception to the 15% limit set out in Listing Rule 7.1.
  • Renewal of a proportional takeovers provision if there is one in the Constitution.

Check whether the time has come around for either of these matters to be approved, and if so, ensure they are included in this year’s Notice of Meeting.

4 - Have you allowed enough lead time for your Notice of Meeting?

Members must be given at least 28 clear days’ notice of the AGM. When determining the date to send your Notice of Meeting, your timetable needs to factor in time to consult with ASX (if relevant, discussed in #3 below), as well as printing and mailing time required by your share registry.

Remember to lodge a copy of the Notice of Meeting with ASX immediately at the time of despatch.

3 - Do you need to consult with ASX on your notice of meeting?

Where the AGM agenda includes particular Listing Rule approvals or changes to the Constitution, a draft Notice of Meeting must be submitted to ASX for review before it is despatched to members. ASX has up to five business days (commencing on the day after lodgement) to review the documents and confirm whether it has any objections, unless it requires more time to examine the documents.

2 - Are you prepared for a poll?

Even if the Board believes there is no need for a poll (the voting trends on proxies are overwhelmingly ‘in favour’ of each item), you need to be prepared. Have a poll procedure ready to go (covering logistics, the script for explaining the process to shareholders) and consider who will act as scrutineers (i.e. the company’s auditors or the share registry).

If registration cards are to double up as the voting cards for a poll, make sure people keep their cards until completion of all items of business involving a poll, and then have them collected for counting.

1 - Are you ready to update ASX on the day?

A copy of the contents of any prepared announcement that will be delivered at an AGM must be given to ASX no later than the start of the AGM. If you are holding your meeting in external premises, ensure that you have internet access in order to connect to the ASX platform.

Blast off!

Careful planning and time management are critical to a successful AGM. By considering these steps and taking appropriate action at the right time, you will have laid the groundwork for an AGM with minimal surprises. Finally, remember to report the votes on all items of business to ASX immediately after the AGM has wrapped.

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The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.