Treasurer Grants Virtual AGM Green-Light Amid COVID19
Treasurer Josh Frydenberg has granted Australian companies the ability to hold annual general meetings (AGMs) online for the next six months, as the economy seeks to get back on its feet after coronavirus.
The news is tipped to spark a potential lift in demand for teleconferencing hardware, software and security infrastructure, as some seek to upgrade tech capabilities (e.g. bandwidth restrictions and backup streaming).
Announced on Tuesday, new temporary powers have been added into the Corporations Act which will permit local companies to hold their AGMs online. A quorum will also be achievable via the numbers of shareholders attending online.
The news comes as many Aussie companies questioned the feasibility of traditional AGMs given social-distancing parameters imposed by COVID19.
The ruling has been widely welcomed by industry bodies who assert it provides certainty and a cost-effective solution to companies in coming months.
Written in 2001, the Act was written in a lesser digital age, and mandates AGMs have the physical meeting of shareholders.
For the six months from May 6, Australian companies will be relieved from potential legal action under the Corporations Act for holding an AGM online.
Treasurer Frydenberg states the temporary changes must ensure online meetings give shareholders the “reasonable opportunity” participate (e.g. shareholders can ask question to board members online). Shareholder voting must also be able to occur online.
Changes will also company officers to have documents signed electronically – previous signatories had to sign the same physical document.
Some commentators claim the changes invite a broader long-term review of the Corporations Act to come more into relevance with the future digital age. Others warn a virtual AGM places demographics who are less tech-savvy (e.g. senior citizens) at a disadvantage.