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Are virtual AGMs bad for retail investors?
An Australian fund manager is marshalling nearly 90,000 shareholders against the federal government’s plan to make virtual annual general meetings permanent, arguing that it is “undemocratic” and “grossly unfair to retail investors”.
Are virtual AGMs bad for retail investors?
An Australian fund manager is marshalling nearly 90,000 shareholders against the federal government’s plan to make virtual annual general meetings permanent, arguing that it is “undemocratic” and “grossly unfair to retail investors”.
Investors are making plans against Treasurer Josh Frydenberg’s goal to make online-only shareholder meetings permanent, with investors saying it will allow company executives a way to avoid answering difficult questions.
Leading the charge is Wilson Asset Management chair Geoff Wilson who campaigned against Labor’s franking credit policy last year and has mobilised his 88,000 shareholders to block the government’s move.
Mr Wilson has encouraged retail shareholders to join WAM in “arguing for AGM transparency and accountability to be upheld”, saying it is firmly opposed to a move that will “diminish retail shareholders’ rights”.
“Conducted in person, AGMs provide retail investors with the ability to directly and publicly asks questions of a company’s board of directors,” Mr Wilson said in a letter to shareholders.
“The virtual alternative, as we have experienced this year, allows boards to omit, rephrase and reinterpret shareholders’ questions. Retail shareholders will be unfairly impacted by this proposal as they have limited access to a company’s board and management team outside of an AGM.”
Companies have been temporarily permitted to hold virtual AGMs in order to comply with social distancing measures, but the Treasury has opened a consultation on making them permanent. WAM has provided shareholders with a template response that could be submitted to the Treasury ahead of the close of the consultation period on 30 October.
“As a retail shareholder, I oppose the proposed relaxation of companies’ requirement to conduct transparent AGMs,” the template reads.
“Without physical meetings, retail shareholders will face yet another disadvantage in accessing companies, asking questions and participating in a transparent process.”
Mr Wilson has utilised similar tactics before during a campaign against the Labor Party’s efforts to remove franking credits – a move he said was “doomed to fail”.
“Labor’s proposal would impact the entire economy and cause suffering to low-income earners and modest retirees who have worked and saved under a fair system that should be respected and safeguarded… it should be abandoned to protect the living standards of all Australians,” Mr Wilson said at the time.
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