2020 was a wholly unexpected year, resulting in companies making drastic changes to the way they conducted business and specifically AGMs. The Link Group meeting team ran 771 meetings including AGM, extraordinary and scheme meetings, creditor meetings, ballots, member meetings and meetings for superannuation funds.

Link Market Services Australia AGM Season

In the first half of the year, the immediate challenge for both our listed and unlisted clients was the ability to hold their AGM by 31 May 2020.

The Australian Securities and Investments Commission (ASIC) announced on 20 March that it would take no action if AGMs were postponed for two months, and temporary changes were made to the Corporations Act, supporting AGMs facilitated online using the appropriate technology. This provided certainty that companies would meet their regulatory and compliance obligations by holding an online meeting.

Then, on 5 May, the government announced changes that would allow companies to convene annual general and other meetings prescribed under the Corporations Act, entirely online, rather than face-to-face. The changes also provided businesses with certainty that when company officers sign a document electronically, the document is considered validly executed.

On 31 July, this relief was extended until 21 March 2021.

Virtual Meetings

Link Group’s meetings team managed over 393 virtual or hybrid meetings in Australia using our proprietary technology, with 50% of meetings conducted via video webcast and 50% via audio webcast.

In December we witnessed virtual AGM attendance records hit an all-time high with 1,261 people logging in to attend the Westpac AGM virtually.

We facilitated the first virtual AGM in Papua New Guinea and virtual meetings in the UAE and New Zealand, as well as meetings where clients required their CHESS Depository Interest (CDI) holders listed on the ASX to participate.

We also facilitated virtual meetings for several superannuation companies including Qantas Super, Prime Super and Legal Super, and for member organisations including NRMA, RACQ, Rugby Australia, Tennis NSW, ME Bank and Murray Irrigation Limited.

The virtual meetings were able to simultaneously connect directors and presenters from various locations around the world including the USA, Russia, Japan, India, France, and the UK. Common topics at AGMs include COVID-19 and how businesses have adapted, and remuneration of not just the Board and KPIs but also other levels within the company.


Elections, and in particular their integrity, has been a hot topic in the news recently. Certainly, for any election, at government, association or any level, the integrity of the vote count is crucial.

In 2020 Link Group successfully conducted elections for several organisations including Australian Institute of Company Directors, RACP, Amnesty International Australia, RSL NSW, Hand Heart Pocket, Tennis NSW, and Victoria Farmers Federation. A broad spectrum - but all with the same objective; to provide their members with the comfort of an independent organisation acting as Returning Officer – which in the current environment is vitally important.

Surprisingly, a lot of organisations still use paper voting with a secret envelope. We work with clients to introduce online voting to their members, which is new territory for some. We have also moved a lot of our ballot clients away from the secret envelope – resulting in significant cost savings.

During 2020 shareholders remained our clients’ focus and together through Link Group’s technology we provided shareholders with reasonable opportunity to engage with Boards, vote and ask questions prior and during an AGM, all from the safety and convenience of their own homes. With the lessons learned during 2020 we expect to improve and grow our meeting offering making it easier for our clients to meet their goals, comply with regulations and continue engaging with their shareholders.

We are fortunate to work with over 400 clients each year, from S&P/ASX 20 entities to small caps and not-for-profits. Accordingly, we have visibility over a diverse range of entities, across a range of sectors and industries and we manage and attend many members’ meetings in our role as company secretary.

Ahead of the 2020 AGM season (and pre COVID-19), we encouraged our ASX-listed entities to consider how technology could be used to facilitate the participation of investors at AGMs.

This was largely driven by the release of the Fourth Edition of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations, in which the Council encourages listed entities with large or geographically diverse registers to consider this issue, including, for example live webcasting of meetings and hybrid meetings that allow investors to attend and vote in person, by proxy or online.1

As a result of the global pandemic and Government restrictions in place on public gatherings and social distancing (as well as travel restrictions), many companies had little option, but to hold fully virtual members’ meetings in 2020.

Use of technology

Our team has been using technology to hold hybrid members’ meetings2 in Australia since 2016, however, our involvement in fully virtual members’ meetings3 in Australia was completely new in 2020 and was enabled by the Treasurer issuing the Corporations (Coronavirus Economic Response) Determination (No. 1) 2020 (the Determination).4

In summary, the Determination permits companies, on a temporary and limited basis, to:

  • provide notices of meeting via email (for shareholders who have provided an email address) or alternatively post a letter or postcard to shareholders advising how to find the notice of meeting documents online. This significantly reduces the cost of printing and posting often bulky meeting documents; and
  • hold a virtual or hybrid member meeting using one or more technologies.

We are generally supportive of the use of technology to make it seamless for shareholders to interact with the companies in which they invest, as well as reducing costs to issuers and the positive environmental impacts that result.

In 2012, the New Zealand legislation was amended to permit a shareholder (or their proxy or representative) to participate in a shareholder meeting by means of “audio, audio and visual, or electronic communication” with approval of the Board of the company.5 We have been advocating for a number of years for similar changes to the law in Australia in relation to member meetings and technology.

In addition, the amendments expressly provided that voting may take place at shareholder meetings by “any method permitted by the chairperson of the meeting” and approved by the board. This amendment provides flexibility for companies to adapt shareholder meetings and voting to embrace technology as it develops.

While a hybrid or virtual meeting will not suit every company and shareholder, the benefits can be considerable, including:

  • the ability for companies to reach a wider shareholder base and engage with investors in real time regardless of geographic location
  • shareholders selecting how they engage with the companies in which they invest, which is likely to see an increase in shareholder participation and engagement
  • a potential reduction in costs to companies and environmental impacts — which in turn are beneficial to all investors and the community.

In 2020, Treasury also proposed permanent changes to the law applicable to member meetings, specifically in relation to virtual meetings and the provision of electronic notices of meeting.6 At the time of writing, it is unclear when or if Treasury will approve the proposed permanent changes to law, and the Determination has currently only been extended until 21 March 2021.

Accordingly, it is not currently clear how most companies will proceed with holding members’ meetings for 2021 after the Determination expires, given the current Government restrictions imposed on public gatherings and travel restrictions.

If the Determination is extended again or the law is changed, we expect many companies to continue to hold virtual meetings, at least while the global pandemic continues.

No disenfranchised shareholders

One of the criticisms of fully virtual meetings has been that it can tend to disenfranchise shareholders. We do not think this is generally the case, for the following reasons:

  • Section 250S of the Corporations Act provides that ‘the chair of an AGM must allow a reasonable opportunity for the members as a whole at the meeting to ask questions about or make comments on the management of the company.’7
  • In our experience with virtual meetings in 2020, our clients were highly cognisant of their obligations under the Corporations Act and the need to allow shareholders participating both at the physical meeting (for hybrid meetings) and online a reasonable opportunity to ask questions about or make comments on the management of the company, the remuneration report and the financial statements and audit.
  • Ahead of the AGMs, our clients held rehearsal to test the technology, and confirm the chair and key stakeholders were comfortable with the technology.
  • Most of our clients also had processes in place to maintain a record of any questions submitted online (for several reasons, including in the event a shareholder complains that the company was ‘cherry-picking’ questions). Link Group's virtual meeting platform has the capability to record all questions submitted online.
  • Introducing an online component involves steps and processes that are different from a traditional, physical-only meeting, for example allowing time for shareholders participating online to submit questions. The moderator(s) are a key part of facilitating an online component of a meeting — the moderators essentially act as the connection between the chair and the shareholders participating online. It is the role of the moderator to manage, receive and electronically send any questions/comments submitted during the meeting to the chair — the chair is able to view the questions on a screen in front of the microphone.

Increased focus on director re-elections

Historically, many entities viewed director re-elections as “non-events” which were often passed with nearly unanimous support and few questions from investors.

Similar to trends observed in recent years, we have continued to see an increased focus on individual director re-elections, particularly in underperforming organisations with poor financial results or governance issues.

There were a number of protest votes against director re-elections, specifically where the director was a long-standing director who was part of the board in place at the time of the poor performance and potentially had the ability to influence and approve certain outcomes, or at least should have been aware of certain issues during that time.

The recent AGM season has also shown that some investors are willing to extend their “against” votes to organisations which are not necessarily the target of the “against” vote – in that if directors who are up for re-election are also directors of other entities which are in the spotlight for the wrong reasons, investors may vote against the director’s re-election even if the entity itself is not experiencing issues.

While some entities as a matter of practice, request their directors subject to re-election to address the meeting and provide a brief biography and the reasons they believe they should be elected to the board, this is not necessarily common practice.

Again, continuing on from the 2017, 2018 and 2019 AGM seasons, we observed at a number of meetings, investors requesting directors subject to re-election address the meeting and outline the benefits and attributes they would bring to the board composition and an increase of questions being asked by investors regarding director re-elections.

Remuneration remains front and centre

It is no surprise that remuneration matters continued to dominate many AGMs. Some of our clients who have historically received almost unanimous support for their remuneration reports, had “No” votes creeping close to a strike.

2020 also saw the continued trend of using the remuneration report to express discontent not only relating to remuneration related matters but extending more broadly in relation to a company’s general and financial performance.

Environmental, social and governance matters

Again, continuing trends from recent years, there was a focus on environmental, social and governance issues, especially at the top end of the S&P/ASX indices.

Investors are continuing to use shareholder resolutions as a way of drawing attention to certain issues and to use the AGM as a platform to agitate for change.

1 ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations, Fourth Edition, commentary on Recommendation 6.3, page 24.

2 A hybrid meeting generally refers to a general meeting where shareholders (and proxy holders) are able to participate (including to vote and ask questions) at meetings either at a physical meeting (similar to a traditional meeting) or online (for example, by using a computer, iPad, tablet or smartphone to participate in the meeting).

3 A virtual meeting or online meeting generally refers to an online only meeting where shareholders (and proxy holders) can view and hear proceedings, vote and ask questions online and there is no physical component of the meeting.

4 The Determination was extended by Corporations (Coronavirus Economic Response) Determination (No. 3) 2020 until 21 March 2021. At the time of writing, Treasury has not yet confirmed whether the Determination will be extended again.

5 Companies Act 1993.

6 Corporations Amendment (Virtual Meetings and Electronic Communications Bill 2020).

7 Section 250S(2) provides that an offence based on section 250S(1) is an offence of strict liability. Section 250S is also supported by section 250SA of the Corporations Act ‘at a listed company’s AGM, the chair must allow a reasonable opportunity for the members as a whole to ask questions about, or make comments on, the remuneration report.’ Section 250T also provides that if the company’s auditor or their representative is at the meeting, the chair of an AGM must allow a reasonable opportunity for the members as a whole at the meeting to ask the auditor questions relevant to certain matters.

The 2020 AGM season was disrupted by COVID-19, leading many of our clients to seek out new ways of communicating with investors. We saw clients pivot to our virtual and hybrid meeting solutions, resulting in a continuation of the key trends from the last 3 years.

Remuneration continued to be a key focus for investors, with particular attention given to those companies where executive bonuses seemed to contradict the impact the pandemic had on their business, especially when the corporate sector received financial assistance from the Australian Government in the form of the JobKeeper scheme.

The Virtual AGM - Practical challenges

Remote working and the constraints on the free movement of individuals led to a profound change in shareholder engagement, particularly on the day of the AGM. The forced move to hybrid and fully-virtual AGMs initially sparked fears that shareholder rights would be diluted. Following an engaging season with strong voter turnout (albeit online) shareholder engagement remains high.

Our team locally and overseas, were heavily involved in supporting clients and ensuring shareholder expectations were met in a virtual AGM setting, assisting with the delivery of 350 virtual and hybrid AGMs. This support also included the setup and successful delivery of rehearsals, location and equipment review to make sure the events were as fail safe as possible.

Remuneration – An expectation that remuneration outcomes align with company performance

Orient Capital’s campaigns saw no material change to the number of superannuation funds voting against remuneration resolutions when compared to 2019, and a slight increase from investment managers against votes on the remuneration.

However, the number of strikes increased in 2020, with 25 issuers receiving a strike. The against votes we also quite significant, with over 21 issuers receiving more than 50% against the Remuneration resolution – compared with three in 2019, and seven in 2018. In 2019 the highest was over 58% against the remuneration compared with a high of over 88% in 2018 (with a further five strikes with more than 60% against the same year).

Activism and ESG

Throughout 2020, prominent shareholder activists, the Australasian Centre for Corporate Responsibility (ACCR) and market forces continued to be prominent as they pushed their commitment to holding corporates accountable in terms of their ESG with a particular focus on the climate.

Companies need to think more holistically about corporate governance being a subset of their over-arching Environmental, Social, and Governance (ESG) policy. According to the ACCR1, 2020 saw 23 resolutions across 8 companies, compared to 32 across 12 companies in 2019.

While the numbers were slightly reduced from 2019, one could argue that they achieved significant success on three of those campaigns where the resolutions received substantial shareholder support from institutional investors.

Directorship – Greater focus on board of director oversight and board composition

Director scrutiny continued to be a focal point in 2020. Orient Capital campaign data indicated an overall decrease in votes against the election of management-nominated directors compared to previous years. For 2020, superannuation fund support for management-nominated directors increased by 10% compared to 2019. Conversely, there was only an increase in support for management-nominated directors of 1.8% by investment managers during the same period.

Areas of concern related to director elections were consistent with previous years, with director independence, board composition and diversity, and over-boarding the main themes.

Proxy advisors - Make time to build your own governance focused relationships

The role and influence of proxy advisors continues to be substantial, with Glass Lewis, ISS and Ownership Matters having the largest influence on Australian-listed entities.

Investors continue to subscribe to proxy advisors and reference their data when voting. However, with variable sources of other information, a negative recommendation does not guarantee a strike.

Our data suggests that there has been a change in the trend regarding the influence proxy advisors hold when recommending that shareholders vote against the remuneration report. The 2020 data indicated that on average, when proxy advisors make voting recommendations against the remuneration report; Super Funds will ignore said recommendations on 68.8% of occasions, and investment managers will do so in 78.3% of cases.

The year ahead

In 2021 we expect a continuation of key trends, which echoes what we have seen globally after the AGM season.

Travel restrictions will continue for some time and as such we anticipate the continuation of hybrid and virtual meeting technologies utilised by organisations to bring board members and shareholders together. We have seen several ASX clients making constitutional amendments to enable them to continue to deliver meetings in this manner as per the Government’s current guidelines which are due to expire on 21 March 2021.

The focus on ESG will continue to dominate in 2021, with climate change a key focal point. In December, we saw Climate Action 100+ release their 2020 progress report, revealing almost 50% of the investor signatories having committed to net-zero emissions by 2050, or sooner. Meanwhile, the Australian Council of Superannuation Investor’s (ACSI)’s latest climate change disclosure review made it clear that a lack of corporate disclosure made it challenging for investors to clearly understand climate focused goals.

InfluenceMap, an independent think tank, states in their latest report (Asset Managers and Climate Change 2021) that shareholder proposals concerning climate risk received mixed responses from asset managers and were not forceful enough to drive change. this sentiment is echoed by both principles for responsible investment (PRI) and shareaction. meanwhile the international financial reporting standards council (IFRS)’s proposal to standardise sustainability reporting has received support from over 450 institutional investors, including norges and calstrs; another step in the right direction.

The appointment of board directors with respect to diversity; gender, ethnicity, and social background will be a key focus for investors in the year ahead. Research undertaken by McKinsey in 2020 showed that a diverse and inclusive workforce not only offers improved decision making it also has a positive effect on the company’s bottom line. overall, many investors have released their updated governance and stewardship targets for the year ahead and diversity is high on the agenda. J.P. Morgan has committed to fund $30 billion worth of projects over the next five years to break down barriers of systemic racism9.

Remuneration, in what will continue to be a challenging economic environment, will remain another key area for investors in 2021. Those companies receiving government support will need to pay particular attention to their remuneration framework, executive variable pay and LTI/STI arrangements. Orient Capital’s ownership analysis continues to provide organisations with a clear understanding of their ownership base and where the influence and voting power lies.

Key areas of focus for 2021

  • Know your shareholder base
  • Continued engagement with shareholders
  • Clarity around remuneration framework
  • Ensure clear targets for performance metrics
  • Clearly articulate ESG metrics

1 https://www.accr.org.au/research/australian-esg-resolution-voting-history

2 https://www.jpmorganchase.com/news-stories/jpmc-commits-30-billion-to-advance-racial-equity