University of Western Australia - the UWA Profiles and ... › files › ... · University of Western Australia-Faculty of Law Research Paper No. 2013-33 ... The annual general meeting

Electronic copy available at: http://ssrn.com/abstract=2376676

University of Western Australia

University of Western Australia-Faculty of Law Research Paper

No. 2013-33

Public company communication, engagement and accountability: Where are

we and where should we be heading?

Gill North


Public company communication, engagementand accountability: Where are we and whereshould we be heading?

Gill North*

The annual general meeting was introduced as an essential element of thepublic company governance model. However, the usefulness of thesemeetings is being increasingly questioned both in Australia and elsewhere.The article initially examines the role of annual general meetings in Australia.Proposals to enhance the value of these meetings are reviewed. The efficacyof annual general meetings is then discussed within the broader context ofpublic company communication, engagement and accountability. Most listedcompany exchanges involving governance and operational matters occurduring private meetings with institutional attendees. The public discoursetends to be limited and sanitised. The article argues that the rationales andassumptions underlying this hierarchical communication structure are deeplyflawed. Annual general meetings provide a limited forum once a year forshareholders to meet and directly question company directors. Broader andmore robust governance and accountability mechanisms will only emergewhen listed companies are required to utilise available digital technologies tocommunicate and regularly engage with all of their stakeholders (and critics)in the public arena. Public corporations are privileged legal constructs, and assuch, they should be compelled to communicate with, and to remainaccountable to, the public at large.

INTRODUCTION

[S]atisfactory views on policy can only come from a patient study of how, in practice, the market, firms,and government handle the problem of harmful effects.1

Annual general meetings (AGMs) were initially introduced in Europe as a representative forum withinthe local parish governance structure. The early companies legislation in the United Kingdom andAustralia encompassed and gradually extended these principles. Legislators have required the holdingof members’ meetings since the establishment of limited liability companies to ensure thatshareholders are able to hold directors and managers to account for the operation of the company. InAustralia, the AGM is the mandated forum under the Corporations Act 2001 (Cth) for the submissionof resolutions that require the consent of members in general meeting and for the provision ofreasonable time for shareholders of public companies to question directors about the company’sstrategy, performance and operational matters.

Debates around the need for, and value of, corporate AGMs have intensified over the last decade.The Parliamentary Joint Committee on Corporations and Financial Services considered the role ofAGMs in 2008 within the general context of shareholder engagement.2 The Corporations and Markets

* BCom, CA (NZ), SIE(Dip), ASIA exams (UK), LLB (Hons), PhD (Aust); Associate Professor, Faculty of Law, University ofWestern Australia.

1 Coase R, “The Problem of Social Cost” (1960) 3 Journal of Law & Economics 1 at 10.

2 Parliamentary Joint Committee on Corporations and Financial Services, Better Shareholders – Better Company – Shareholder

Engagement and Participation in Australia (June 2008) (Engagement Report).

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Advisory Committee (CAMAC) has now been asked to specifically consider the role and usefulness ofthese meetings.3 A discussion paper for the purposes of consultation was released by CAMAC inSeptember 2012.4

The article argues that the efficient and fair operation of public corporations requires theestablishment of accountability mechanisms that govern and encompass all corporate participantgroups, in order to minimise the harmful effects of conflicts of interest.5 This accountabilityframework needs to be supported by a corporate communication structure that ensures the broadestscrutiny and engagement possible, including by the public at large. Most commentators concede thatthe provisions that require a public company to hold an AGM were intended as an essentialcomponent of a public company governance model.6 Many suggest the meetings are no longerachieving this purpose. These critics argue that changes to modern communication processes and theestablishment of continuous disclosure regimes have diminished the need for AGMs.7 Others arguewith equal vehemence that the AGMs remain an important forum for retail investors,8 and it is up tocompanies to enhance the value of the meetings.9

The article discusses proposals to encourage potentially greater attendance and participation atAGMs and to improve the timing, format and content of the AGMs. It then explores these issueswithin the broader context of listed company communication. Company AGMs provide a limitedopportunity once a year for shareholders who are not invited or who have no virtual access to theprivate meetings to meet company directors and managers and to raise issues directly. Such meetings,on their own, however, do not enable sustained and robust engagement with, or accountability of,company directors and managers. In practice, most regular and comprehensive listed companyexchanges dealing with governance and operational matters occur during private one-on-one and small

3 Letter from the Hon David Bradbury MP, Parliamentary Secretary to the Treasurer, to Ms Joanne Rees, Convenor, Corporationsand Markets Advisory Committee (5 December 2011), http://www.camac.gov.au/camac/camac.nsf/byHeadline/PDFReference/$file/AGM.pdf viewed 7 October 2012.

4 Corporations and Markets Advisory Committee (CAMAC), The AGM and Shareholder Engagement, Discussion Paper

(September 2012), http://www.camac.gov.au/camac/camac.nsf/0/A41EFEAB5B8B7BCACA256ED90006082A?opendocumentviewed 7 April 2013.

5 Some commentators suggest the establishment of a normative framework for shareholder meetings is necessary to inform theAGM debate. See eg Simmonds R, “Why Must We Meet? Thinking about Why Shareholders Meetings are Required” (2001) 19C&SLJ 506. The published literature that outlines and discusses corporate law theories and corporations’ models is extensive.See eg Hayden G and Bodie M, “Shareholder Democracy and the Curious Turn Toward Board Primacy” (2010) 51 William &Mary L Rev 2071; Blair M and Stout L, “A Team Production Theory of Corporate Law” (1999) 85 Virg LR 247; Kornhauser L,“The Nexus of Contracts Approach to Corporations: A Comment on Easterbrook and Fischel” (1989) 89 Col LR 1449;Bottomley S, The Constitutional Corporation: Rethinking Corporate Governance (Ashgate Publishing Co, 2007); Whincorp MJand Keyes ME, “Corporation, Contract, and Community: An Analysis of Governance in the Privatisation of Public Enterpriseand the Publicisation of Private Corporate Law” (1997) 25 Federal Law Review 51. The existing corporations models generallyemphasise the incentives and interests of one of the corporate participant/stakeholder groups such as the directors, managers,institutional shareholders, retail shareholders, employees or one of many external parties. Arguably, the highly political nature ofcompany policy and practice and the differing interests and incentives of the various stakeholders mean that broad consensusaround a normative framework for public corporations is unlikely.

6 See eg Stratling R, “General Meeting: A Dispensable Tool for Corporate Governance of Listed Companies?” (2003) 11Corporate Governance 75; Apostolides N, “Exercising Corporate Governance at the Annual General Meeting” (2010) 10Corporate Governance 140.

7 See eg Engagement Report, n 2, citing Sheehy T and Abraham P, Chartered Secretaries Australia (CSA), Committee Hansard,Sydney (16 April 2008) p 5.

8 For the purposes of this article, retail investors are defined as the market participants who invest directly on their own behalf.Institutional investors, by contrast, make investment decisions on behalf of clients or provide security recommendations orinvestment research to clients.

9 See eg Mace J, “Feature Facing Up to Shareholders”, Company Director (1 August 2010), http://www.companydirectors.com.au/Director-Resource-Centre/Publications/Company-Director-magazine/2010-back-editions/August-2010/August/Feature-Facing-up-to-shareholders viewed 7 April 2013.

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group meetings with selected institutional participants.10 The increasing scale of these privatemeetings explains, to a large degree, the low attendance levels at AGMs and the tone, content andexpectations of these meetings.

The article argues that corporate policy settings and practices that encourage companies tomanage their communication programs predominantly through private regular exchanges with selectedparticipants are problematic. The arguments that are promulgated to justify these hierarchicalstructures and processes, which are generally founded on preconceived characterisations ofinstitutional and retail investors, are deeply flawed. Indeed, it is suggested that frameworks that allowcompany managers high levels of discretion to determine the participants they communicate andengage with are likely to provide the worst outcomes possible. Such frameworks fail to mitigate thecronyism, conflicts of interest, short-term incentives, and information asymmetry concerns that thegovernance and disclosure regulation is intended to overcome. These structures also allow companymanagers and the favoured participants to espouse aspirations of transparency, equal access and fairconduct, while retaining the advantages that flow from the private arrangements.

The digital era has radically changed the mechanics and potential breadth and scale of companycommunication and accountability. This makes it important for policy-makers, scholars andpractitioners to understand the extent to which Australian companies have voluntarily adopted digitalmeans to broaden their governance and disclosure audiences, and to enhance the quality of the publicdiscourse. Recent reviews of listed company communications suggest that while companies haverapidly embraced digital means to disseminate the mandated reports, disclosures and administrativenotices, many have been slower to adopt digital processes to improve the timeliness and quality of thepublic reporting and to enable regular interactive communication with stakeholders beyond the coreinstitutional group.

The article concludes that it is essential that 21st century public corporations operate as “public”corporations. Robust and effective governance and disclosure regulatory frameworks will only emergein Australia when listed companies are required to utilise available digital technologies tocommunicate interactively and to regularly and comprehensively engage with all of their constituentstakeholders (and critics) in the public arena.

The article is presented in six parts. The historical development of company AGMs is outlined inthe first part and is followed by a discussion of the regulation and practice of corporate membermeetings. The future of the company AGM and proposals to enhance the value of these meetings arethen considered. The broader corporate communication framework is then reviewed, including asummary of recent empirical reviews. The final part concludes.

ANNUAL GENERAL MEETINGS: AN HISTORICAL PERSPECTIVE

The AGM has a long history, possibly stretching back to cantons in central and eastern Switzerland inthe 14th century.11 In England, the AGM was included as part of the parish governance structuredeveloped after the Reformation.12 It is suggested that these meetings encompassed democraticprinciples because the ratepayers who attended and voted at these meetings sought to influence theoperations and management of the local parish council.13

The representative governance rules and the record-keeping requirements that were included inthe Parishes Acts of the early 19th century were extended and applied when the Joint Stock

10 See North G, “Closed and Private Company Briefings: Justifiable or Unfair?” (2008) 26 C&SLJ 501.

11 See eg Cordery C, The Annual General Meeting as an Accountability Mechanism (Working Paper No 23, School ofAccounting and Commercial Law, Victoria University, Wellington, New Zealand, 2005) p 6.

12 Cordery, n 11, p 6. See also Tate WE, The Parish Chest: A Study of the Records of Parochial Administration (3rd ed,Cambridge University Press, Cambridge, 1969); Webb S and Webb B, English Local Government from the Revolution to the

Municipal Corporations Act: The Parish and the County (Longmans Green, London, 1924); Bavly D, Corporate Governance

and Accountability: What Role for the Regulator, Director and Auditor? (Quorum Books, Westport, CT, 1999).

13 Cordery, n 11, p 6.

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Companies Act 1856 (UK) was enacted in the United Kingdom.14 The AGMs were intended toprovide shareholders with a face-to-face forum at which the chair would give an outline of thecompany’s performance and position. The Joint Stock Companies Act required companies to holdannual shareholders’ meetings and to present a full and fair balance sheet.15 The balance sheet had tobe posted to all registered shareholders seven days prior to the meeting.16

Similarly in Australia, companies have been obliged to maintain accounts and to present them ata members’ meeting since the earliest company legislation. For instance, ss 78 to 82 of the Companies

Act 1864 (Vic) required companies to maintain true accounts and to present a statement of the incomeand expenditure and a balance sheet every six months to be laid before the company in generalmeeting. An auditor’s report expressing an opinion as to whether the balance sheet was full and fairwas also required at least once a year.17 A hard copy of the balance sheet had to be served on everymember seven days prior to the meeting. More than 30 years later, the Companies Act 1896 (Vic)introduced a certificate from the directors on behalf of the board stating that in their opinion thebalance sheet exhibited a correct view of the state of the company’s affairs.18 It also provided for ageneral meeting of the members of the company within two months after the date of the registration ofthe company and referred to it as the “statutory meeting”.19

The Uniform Companies Acts in the 1960s established the AGM in a form that is recognisabletoday. For example, Div 3 of the Companies Act 1961 (Vic) deals with meetings and proceedings.20

Section 136 required companies to hold a general meeting to be called the “annual general meeting”once in every calendar year and not more than 15 months after the holding of the prior AGM, exceptthat the first such meeting had to be held within 18 months of incorporation.

MEMBER MEETINGS: THE REGULATION AND PRACTICE

The current regulation governing meetings of company members in Australia is provided in Pt 2G.2 ofthe Corporations Act 2001 (Cth) (the Act). Divisions 1 to 7 of Pt 2G.2 provide the general proceduralrules that apply to all shareholder meetings. Division 8 specifically deals with public company AGMs.The CAMAC discussion paper provides a useful summary of the rules applying to AGMs.21 A publiccompany with more than one member must hold an annual general meeting within 18 months of theregistration of the company, and subsequently at least once a year within five months of the end of thefinancial year.22 The meeting must be held at a reasonable time and place.23 Some companies hold theAGM in the same location every year on a weekday during normal business hours. Others hold it atdifferent cities each year.

The duration of an Australian listed company AGM may be less than 10 minutes, or in a fewinstances, may extend to more than four hours.24 Some companies voluntarily provide webcast access

14 Cordery, n 11, p 11, citing Proceedings of the Business Archives Council (Great Britain), Annual Conference, 1994.

15 Joint Stock Companies Act 1856 (UK), ss 70, 72.

16 Joint Stock Companies Act 1856 (UK), s 73.

17 Companies Act 1864 (Vic), s 94.

18 Companies Act 1896 (Vic), s 24(3).

19 Companies Act 1896 (Vic), s 55.

20 Similar provisions were included in the statutes of each State and Territory enacted as part of the uniform legislation.

21 CAMAC, n 4.

22 Corporations Act 2001 (Cth), s 250N.

23 Corporations Act 2001 (Cth), s 249Q.

24 For example, Telstra Ltd answers all member questions before closing an AGM, resulting in meetings that typically last forfour hours: telephone conversation with Lisa Zimmet, an investor relations representative of Telstra, in April 2012.

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to the AGM on a real-time and/or archived basis. Many companies provide refreshments at the end ofthe meeting to allow shareholders to discuss company matters with the directors and executives on aninformal basis.25

Members can attend the meeting or nominate a person as their proxy to attend.26 Members mayappoint their own proxy or may appoint the chair of the company as proxy. A member may direct theway their proxy is to vote on particular resolutions or may leave the proxy to vote as they see fit. Aproxy appointed to attend and vote for a member has the same rights as the member to speak at themeeting and to vote.27 The chair is generally required to inform the meeting whether any proxy voteshave been received and how the proxy votes are to be cast.28 Listed companies must notify theAustralian Securities Exchange (ASX) of the resolutions passed at a members’ meeting, and thenumber of votes cast in favour and against the resolution (and any abstentions) including the proxyvotes.29 In practice, most resolutions at listed company AGMs are determined by proxy votes,including directed proxies held by the chair. Listed companies can now receive and apply proxydocuments lodged electronically by shareholders. Investors can also submit their AGM resolutionvotes online in advance of the meeting through the company registry websites.

Voting participation levels in Australia have increased significantly over the last decade to around60%, reflecting more active involvement by the major institutions that manage superannuationmoneys.30 In contrast, attendance levels at Australian listed company AGMs have been falling. Abiannual survey carried out by Chartered Secretaries Australia (CSA) indicated that the proportion ofthe top 200 company AGMs attracting more than 300 shareholders fell from 35.7% in 2001 to 11.1%in 2007, and the proportion of top 200 company AGMs attracting fewer than 100 shareholdersincreased from 23.2% in 2001 to 41.3% in 2007.31 Institutional shareholders generally submit theirvotes on the meeting resolutions in advance of the meeting.32 These members do not typically attendthe AGMs as they prefer to meet with the company managers and directors privately.33

The business of an AGM includes consideration of the annual financial report, directors’ reportand auditor’s report; the election of directors; the appointment of the auditor; and the fixing of theauditor’s remuneration.34 Some AGMs are limited to the formal proceedings and tabled resolutions.Others include company presentations and speeches from company executives and the chair. TheAGM presentations and speeches may include a trading update for the period since the financialyear-end. Transcripts of the AGM speeches are generally released through the company announcementplatform of the ASX.

At the AGM, the chair must “allow a reasonable opportunity for the members as a whole at themeeting to ask questions about or make comments on the management of the company”.35 Somecompanies interpret these provisions strictly and require shareholders to address all questions to the

25 While the precise number of companies that provide refreshments is not known, all AGMs attended by the author haveprovided such facilities.

26 Corporations Act 2001 (Cth), ss 249X, 250.

27 Corporations Act 2001 (Cth), s 249Y.

28 Corporations Act 2001 (Cth), s 250J(1A).

29 Corporations Act 2001 (Cth), s 251AA.

30 Geddes V, FIRST Advisers, “Opinion Restoring the Relevance of AGMS”, Company Director (1 August 2010). Geddes doesnot provide the historical voting participation levels.

31 Engagement Report, n 2, p 25, citing Sheehy and Abraham, n 7, p 2.

32 Corporations Act 2001 (Cth), s 249X.

33 See Geddes, n 30. See also Stratling, n 6 at 77. Stratling cites a survey of institutional investors in the United Kingdom in2000. The survey indicated that institutional investors see attendance at the AGMs as a waste of time and they prefer to discussissues privately.

34 Corporations Act 2001 (Cth), s 250R.

35 Corporations Act 2001 (Cth), s 250S.


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chair, thereby preventing members from discussing issues with individual managers or directors. Othercompanies are more flexible in the way they accept and answer questions. Some entities allowquestions to be submitted to the AGM in advance.

The chair must also allow “a reasonable opportunity for the members as a whole to ask questionsabout, or make comments on, the remuneration report”.36 The importance of this member right hasgained prominence since enactment of Div 9 of Pt 2G.2 of the Act.37 Division 9 applies when at least25% of the votes cast on a resolution seeking adoption of the remuneration report are negative at twoconsecutive AGMs.38 At the second AGM where a 25% “no” vote is received, a “spill resolution”must be put to the vote. A spill resolution proposes an extraordinary general meeting of the company’smembers within 90 days at which directors of the company (other than a managing director who isentitled under the exchange listing rules to continue to hold office indefinitely) who wish to remain asdirectors become subject to re-election.39 This process is commonly referred to as the “two strikes andre-election” process.

The two strikes rule remains contentious. Company directors have variously described it asfarcical, ridiculous and disappointing.40 In contrast, Sevior, a fund manager, suggests that to

hear widespread criticism of the two-strikes rule from high-profile sections of the directors’ club meansit is a step in the right direction … It’s not perfect of course, but the more boards are forced to justifysome quite absurd remuneration requests on open ground, the faster we will get to a position wherefairness and objectivity are the main influences on remuneration polices.41

Some of the largest companies received a first strike during 2011, with the level of votes against theremuneration report ranging from 26 to 74%.42 This pool has grown during 2012 with furthercompanies receiving their first “strike” on executive pay.43 It is clear that there is a policy desire topromote greater accountability around company director and executive remuneration issues. However,it will take several years to see the real impact, if any, of the new rules.

THE FUTURE OF THE CORPORATE AGM

In 2008, the Parliamentary Joint Committee on Corporations and Financial Services (EngagementCommittee) was asked to inquire into and report (the Engagement Report) on the engagement andparticipation of shareholders in the corporate governance of companies.44 The Engagement Reportexplained that the corporate governance model in Australia is based “on the delegated authority modelin which company directors make decisions in the company’s interest, subject to shareholderoversight”.45 Similarly, the Cadbury Report that reviewed financial aspects of corporate governance inthe United Kingdom indicated that the board of directors is responsible for “setting the company’sstrategic aims, providing the leadership to put them into effect, supervising the management of thebusiness and reporting to shareholders on their stewardship”.46

36 Corporations Act 2001 (Cth), s 250SA.

37 Section 250V became effective from 1 July 2011.

38 Corporations Act 2001 (Cth), s 250U.

39 Corporations Act 2001 (Cth), ss 250SV, 250W.

40 Burrell A, “Chiefs Agree: Remuneration Two-Strikes Rule is Irritating”, The Australian (Sydney) (19 November 2011).

41 Frost J, “Sevior Backs Executive Two-Strikes Pay Rule”, The Australian (Sydney) (29 October 2011).

42 Burrell, n 40. Smith M, Penrice Soda Directors Survive First Ever Two-Strike Spill (4 March 2013), http://www.brw.com.au/p/leadership/penrice_soda_directors_survive_first_FhuyeT7iM6M7mRlvXrJbTK viewed 7 April 2013.

43 Durkin P, “Anger over Executive Pay on the Rise Again”, Australian Financial Review (Sydney) (13 June 2012).

44 Engagement Report, n 2, p vii.

45 Engagement Report, n 2, p 3.

46 Report of the Committee on the Financial Aspects of Corporate Governance (1992) p 15.

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The listed company governance model in Australia is statutory based, with support from the ASXCorporate Governance Code47 and the individual company constitutions. Section 198A(1) of the Act(a replaceable rule) provides that the business of the company is to be managed by or under thedirection of the directors. Listed Australian company directors therefore generally exercise all thepowers of a company except those that the law or the company constitutions require to be exercised ata meeting of the members. The board of directors determines the strategy and direction of thecompany. While day-to-day business of the company is delegated to the management of the company,the board remains responsible for the monitoring and oversight of the managers. Nevertheless,shareholders continue to have rights that must be exercised in general meeting,48 including the right toappoint and remove the directors of public companies.49 Hodgson J confirmed in Massey v Wales(2003) 57 NSWLR 718; [2003] NSWCA 212 (at [45]) that where the articles of association

of a company provide[s] that the business of the company is to be managed by the directors, there isgenerally no power in the general meeting to make management decisions or to control or direct theboard of directors in the management of the company.

However, “the shareholders may have ultimate control, because they can alter the … [constitution] orremove the directors” (at [60]), quoting Winthrop Investments Ltd v Winns Ltd [1975] 2 NSWLR 666.

Policy-makers have indicated that shareholder participation at the AGM is intended “throughdialogue, disclosure and voting … [to ensure] the accountability of company boards and management,providing an important check on their power that serves to improve corporate governancestandards”.50 The Engagement Committee ultimately concluded that AGMs remain a usefulengagement forum for retail investors to meet with company directors, because these shareholders arenot generally invited to private briefings.51 Its primary recommendation was for the AustralianSecurities and Investments Commission (ASIC) to establish a comprehensive set of guidelines orprinciples for companies holding an AGM.52 The Engagement Report recommendations remain open.In the meantime, David Bradbury, Parliamentary Secretary to the Treasurer, has asked CAMAC tospecifically consider the role and usefulness of listed company AGMs in Australia.53

Some readers may be surprised that the AGM remains the only forum that provides manyinvestors of public Australian companies with a voice. Abolishing the AGM without reforms to thebroader corporate communication policies and practices would place these investors into an untenableposition of enforced passivity, with no legal right to meet or to hold directors and managers toaccount. As the Engagement Report noted:

[T]he notion that those granted responsibility for running publicly listed companies should beaccountable in this way is sometimes met with resistance from elements within the corporate sector.Some company boards prefer instead to use the delegated authority model of corporate governance asan opportunity to operate autonomously, with minimal shareholder-based accountability. This attitude isclearly detrimental to the objective of best practice corporate governance.54

47 Australian Securities Exchange Corporate Governance Council, Corporate Governance Principles and Recommendations

with 2010 Amendments (2nd ed, 2010). Corporate governance is defined (p 3) as “the framework of rules, relationships, systemsand processes by which authority is exercised and controlled in corporations”.

48 Company members have various rights under the Corporations Act 2001 (Cth) including, among others, the rights to appointdirectors; determine the total remuneration cap to be paid to directors; vote at shareholder meetings; vote on the remunerationreport; requisition a meeting; request the circulation of a statement to all members; question the directors and auditor atshareholders’ meetings; approve related party transactions; amend the constitution; institute a statutory derivative action; accessthe minutes of a shareholders’ meeting; and access the register of members (shareholders).

49 Corporations Act 2001 (Cth), ss 201E, 203D.


51 North, n 10.

52 Engagement Report, n 2, p 28. The author is not aware of any publication from ASIC that provides comprehensive guidelinesconcerning the conduct of AGMs.

53 Letter from the Hon David Bradbury, n 3.



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And as the Federal Treasury indicated to the Engagement Committee:

Shareholders must retain effective mechanisms to examine the affairs of the company and voiceconcerns to the company and its managers … Without effective monitoring of directors andmanagement by shareholders, there is an increased risk of directors and managers underperforming.55

The Australian Shareholders’ Association (ASA) understandably opposes any suggestions orproposals to abolish the AGM in its current form.56 Helen Dent, a prior chair of the ASA, describedcomments about the irrelevance of AGMs as the “latest salvo in a long war of attrition”.57 She notedthat the “value of AGMs is entirely in the hands of the companies that hold them”.58 Dean Paatsch,former head of corporate governance advisory firm RiskMetrics Australia, also suggested that thepresumption that the AGMs “have outlived their usefulness is wrong”.59 He advised that companydirectors should see the AGM as an opportunity to “showcase the company and its strategies”.60

Nonetheless, the value of corporate AGMs has been questioned in Australia and elsewhere overthe last decade.61 For instance, CSA suggested that “AGMs no longer appeal to shareholders due tothe absence of a deliberative purpose, with votes determined by proxy before the start of themeeting”.62 It argued that “continuous disclosure has removed the informative role AGMs onceserved”,63 and it questioned the requirement for small companies – those outside the ASX top 300 – tohold an AGM every year when direct voting can be used instead.64 In its submission to theEngagement Committee, the Australian Institute of Company Directors (AICD) emphasised thediminishing importance of physical meetings in a technologically advanced society. It highlighted theconstant information available to investors in the financial media.65 More recently, James MacKenzie,the chair of Mirvac Group and Pacific Brands, questioned the value of AGMs in the modern businessenvironment. He indicated:

With the increased sophistication of institutional investors and the increasing role of proxy houses, youget to the AGM these days and there’s nothing new announced … If you really seriously analyse the

55 Engagement Report, n 2, p 3, citing Treasury, Submission 17, p 4.

56 Engagement Report, n 2, pp 22-23, citing Australian Shareholders’ Association, Submission 38, p 4. The ASA indicated (p 4)that “the AGM is the only forum for shareholders to directly question the board with regard to the management of the company.It is the one opportunity for directors to hear directly the views of shareholders and is an important part of shareholderparticipation and engagement. In the experience of the ASA, companies within the ASX 200 are generally better atcommunicating with shareholders. It is those companies the CSA seek to exclude where shareholders most need this forum.”

57 Mace, n 9. Dent indicated to Mace that “[m]any boards would be happy to avoid facing their owners at AGMs. But they arethe only opportunity for companies to interact with shareholders face to face. They provide an opportunity to hold the boardaccountable for its stewardship of the company”.

58 Mace, n 9.

59 Mace, n 9.

60 Mace, n 9.

61 See eg Engagement Report, n 2; Company Law Review Steering Group (UK), Modern Company Law for a Competitive

Economy: Company General Meetings and Shareholder Communication Consultation Document (October 1999) URN 99/1144;Company Law Review Steering Group (UK), Modern Company Law for a Competitive Economy Final Report, Vol 1 (October2001) URN 01/942; Gray A and Jacobs R, “Abolition of the AGM Moves up the Agenda”, FT.com (1 April 2011).

62 Engagement Report, n 2, p 25, citing Sheehy and Abraham, n 7, p 5. See also Engagement Report, n 2, pp 24-25, citing CSA,Submission 8, p 11. The CSA indicated (p 11) that “the AGM was created in an era of horse and coach; pen and ink; limitedprinting and a fledgling postal service, all of which dictated that members would physically meet with directors annually. It isnow an era of advanced technology: mobile telephones; cameras and text messaging; the internet; webcasting; powerful portablecomputers and geographically dispersed shareholders … the information that is dealt with at an AGM is available many monthsbefore the AGM is held and that this affects attendance.”

63 Engagement Report, n 2, p 25, citing Sheehy and Abraham, n 7, p 5.

64 Engagement Report, n 2, p 25, citing Chartered Secretaries Australia, Submission 8, p 13.

65 Engagement Report, n 2, p 25, citing Australian Institute of Company Directors (AICD), Submission 25, p 44. The AICDSubmission concluded (at [47]): “Despite its limitations many still believe that the annual general meeting provides aninvaluable opportunity for shareholders – particularly retail shareholders – to raise issues, question the board and management… The meeting provides a forum for personal appraisal of new candidates for election to the board and the way in which themeeting is conducted conveys to shareholders something of the culture of the board and the chairman’s character.”

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questions asked at AGMs of public companies in Australia, and the value that comes out of the forumsof those AGMs, you have to conclude there is a significant cost incurred, a distraction and no value tothe process of governance.66

Mark Johnson, the chair of AGL Energy, stated that “When I go to an AGM, I always think of it asjust the price of capitalism. It’s something you have got to do until someone devises a betteralternative.”67

The argument that the continuous disclosure obligations replace the need for AGMs is incomplete.The continuous disclosures provide information on an ad hoc basis between the six monthly reportingperiods, and the content provided is only useful to investors when combined and synthesised withother publicly available company information. At the AGMs, the board speeches generally present asummary overview of the prior year performance, which provides a useful reference point forshareholders to raise questions concerning the outcomes achieved and operational matters. In anyevent, accessing company announcements from the ASX or the company website is a passiveindividual activity rather than an interactive form of communication that requires direct response fromthe board of directors to the shareholders as a body.

ENHANCING THE VALUE OF COMPANY AGMS

Various parties have considered and proposed measures to enhance the value of listed company AGMsin Australia.68 Proposals that have been made include:• leaving the voting at the AGM open beyond the close of the meeting to enable shareholders to

exercise their vote following discussion and questioning at the AGM;• an extension to the statutory timeframe for holding AGMs by a month to ameliorate the crowded

AGM season;• encouraging the chairs of board committees to answer shareholders’ questions at the AGM;• the introduction of a mandatory minimum time for discussion and questions at AGMs;69

• the holding of AGMs at more convenient times;• allowing the press to ask questions at the meeting;• limiting the time available to individual shareholders speaking at AGMs;70 and• the holding of virtual AGMs.71

It is clearly better that the AGM resolutions are debated prior to voting. Similarly, the chairs of boardcommittees should be encouraged to answer questions. Indeed, shareholders should ideally be entitledto pose questions to individual directors and senior executives through the chair. However, a mandatedminimum time for discussion and questions seems impractical, as questions at some of the AGMs maynot be forthcoming.

Live and archived webcasting of AGMs on a listen-only basis poses minimal technical issues.Some listed companies already hold regular virtual group meetings including question-and-answersessions without significant procedural issues.72 While the establishment of participatory AGMs thatallow questions and answers on a real-time basis may be more challenging, potential technologydifficulties relating to orderly questioning during virtual AGMs could be overcome by minorlegislative changes. The meeting provisions could be amended to ensure that the AGM resolutions arenot invalidated and liability cannot attach when parties opt to participate virtually and participation is

66 Mace, n 9.

67 Mace, n 9.

68 See eg Engagement Report, n 2, p 26, citing CSA, Rethinking the AGM (Discussion Paper, 2008) pp 12-13; EngagementReport, n 2, p 27, citing Stephen Mayne, Submission 18, pp 2-5; Engagement Report, n 2, pp 26-27, citing Boardroomradio,Submission 30, p 7.

69 Engagement Report, n 2, p 26, citing CSA, n 68, pp 12-13.

70 Engagement Report, n 2, p 27, citing Stephen Mayne, n 68, pp 2-5.

71 Engagement Report, n 2, pp 26-27, citing Boardroomradio, n 68, p 7.

72 See Boros E, “Corporations Online” (2001) 19 C&SLJ 492; Boros E, “Virtual Shareholder Meeting: Who Decides HowCompanies Make Decisions?” (2004) 28 MULR 265.


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hindered in some way by technology issues. However, virtual meetings should not be viewed as analternative to, or a replacement for, all physical meetings, as both institutional and retail investorsconsistently confirm that observing and meeting company directors and managers (commonly referredto as “eyeballing” the managers) is an important part of their investment decision-making process.73

Most institutional investors meet senior company executives on a regular basis in private or smallgroup meetings, and these meetings enable the attendees to garner timely, comprehensive and detailedinformation. For other investors, the AGM continues to be the only opportunity to observe, meet anddirectly question managers and directors.

AGMs provide listed Australian companies with an excellent opportunity to explain theirperformance and future strategy and plans directly to shareholders and to enhance the company’sreputation and brand. It is also an opportune time for companies to explain their communicationstrategies, including the relevant sources to access information about the company such as thecompany website, presentation webcasts, teleconference calls and email notification services. Inaddition, companies can outline the facilities available to shareholders through the company registryservices. Nonetheless, the role of AGMs, even assuming the proposed improvements are implementedand online participation is permitted, will always be limited. Consequently, these meetings should beonly one of the established mechanisms for communication and accountability between companiesand stakeholders. As Ian Matheson, the Chief Executive Officer of Australasian Investor RelationsAssociation (AIRA), points out:

The AGM has to be held once a year and it is now principally a forum for retail shareholders, so peopleshould just get over their concerns about its worth. It is a necessary evil … They can be tortuous andrequire a lot of preparation for some boards, but sometimes the concern about the AGM and its worthhas more to do with a lack of preparedness and lack of communication with retail shareholders duringthe year.74

Matheson suggests that companies “should reflect … on how they communicate with retailshareholders through the year and recognise their specific information requirements”.75 The currentauthor agrees. Public company AGMs should operate as an important but limited forum that is merelyone limb of an integrated public company governance and communication framework.

ENHANCING CORPORATION COMMUNICATION AND ENGAGEMENT

Company shareholders and stakeholders can only engage directly on matters of corporate governancewhen they have access to relevant information. The key mechanisms through which listed Australiancompanies provide public information include:

• periodic reporting and continuous disclosures;

• company websites;

• member meetings; and

• company briefings.

This part of the article summarises the nature and scope of each of these corporate communicationchannels. However, it is critical to understand and consider these communications on a comprehensiveand integrated basis. Readers should note that the use of company websites, the holding of meetingsbeyond those mandated under the Act, and the provision of open access to company briefings arediscretionary measures that listed companies can elect to adopt or otherwise.

73 See eg Geddes, n 30.

74 Mace, n 9.

75 Mace, n 9.

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Periodic reporting and continuous disclosure

The regulation and practices relating to periodic and continuous disclosure are outlined in otherforums.76 The discretionary nature of key elements of these regimes results in highly variableoutcomes. Independent reviews of listed company periodic reports and continuous disclosures releasedthrough the ASX consistently indicate that much of the content is generic in nature and of lowquality.77 The information in these reports and disclosures is often presented as a public relationsexercise using boilerplate language. The Institute of Chartered Accountants has criticised Australiancompanies for not including information in their annual reports that institutional and retail investorsdesire.78 An examination by ASIC of the Operating and Financial Reviews (OFR) in the 2010 annualreports of 50 of the top 200 listed entities was also highly critical.79 ASIC subsequently released aconsultation paper on effective disclosure in OFRs and formal guidance.80

ASIC also noted in its review of company disclosures that some companies appeared to bedisclosing using alternative profit measures in a way that removed the “bad news”. It indicated thatmany entities excluded “non-recurring” items such as impairment losses and restructuring costs, evenwhen those items appeared in previous years. Following these reviews, ASIC released a consultationpaper on disclosure of financial information other than in accordance with accounting standards, andin December 2011 it released Regulatory Guide 230 on disclosing financial information not inaccordance with International Financial Reporting Standards.81

The current CAMAC review seeks feedback on the role and content of annual reports. The articledoes not address these issues because in the current author’s view, these matters need to be addressedwithin the broader context of periodic reporting. A disclosure framework that attempts to limits accessto performance analysis to that provided in the annual report is not appropriate for the 21st century. Asoutlined and discussed in other forums, the annual report is generally released a month later than thepreliminary final report,82 and during this period, the results are typically discussed at group meetings– that may not provide public access – and at private individual briefings (see discussion on companybriefings below). Hence, by the time the annual report is published, its content is not materiallyprice-sensitive. A more open, regular and integrated reporting framework is needed.

76 See eg North G, “Periodic Disclosure Regulation: Enhancements to Enable All Investors to Make Informed Decisions” (2009)27 C&SLJ 23; Bloch M, Weatherhead J and Webster J, “The Development and Enforcement of Australia’s ContinuousDisclosure Regime” (2011) 29 C&SLJ 253; North G, “Continuous Disclosure in Australia: The Empirical Uncertainties” (2011)29 C&SLJ 394.

77 See eg Australian Securities and Investments Commission (ASIC), “ASIC’s Review of 30 June 2010 Financial Reports andFocuses for 31 December 2010”, Media Release 10-282AD (22 December 2010); ASIC, “Improved Financial Information forInvestors and Others”, Media Release 11-312MR (21 December 2011); North, n 76 (2011).

78 See Engagement Report, n 2, citing Institute of Chartered Accountants (ICA), Submission 7, pp 2-3. The ICA indicated that“In their current form, these reports do not address the company’s strategy, its success or failure in implementing it, or insightsinto what future performance might look like if the strategy is well executed … there is little meaningful information availableabout how the objectives of the company are set, how risk is monitored and assessed, how performance is optimised and whethera company has the ability to create value through entrepreneurialism, innovation, development and exploration, providingaccountability commensurate with the risks involved.”

79 ASIC, n 77. ASIC indicated in its report that the Operating and Financial Reviews in annual reports often lacked informationand explanations that would provide users with an understanding of the drivers of an entity’s performance; most entities did notprovide key performance indicators, production statistics or similar information; most entities did not present the OFRinformation in a single section of the financial report; most entities provided more analysis in investor presentations or analystbriefings lodged with ASX; and about half of the entities reviewed did not disclose business strategies and prospects for futurefinancial years to a level we might ordinarily expect.

80 ASIC, Effective Disclosure in an Operating and Financial Review: Consultation Paper 187 (September 2012); ASIC,Effective Disclosure in an Operating and Financial Review, Regulatory Guide 247 (March 2013).

81 ASIC, Disclosing Non-IFRS Financial Information: Regulatory Guide 230 (December 2011).

82 See North, n 76 (2009).


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Company websites

The content provided on listed company websites largely replicates the information released bycompanies through the ASX. The main exception arises when the websites provide live and archivedaccess to company briefings. Point 6.8 of the Good Governance Guide published by CSA indicatesthat company websites should be used to provide:• all relevant announcements for the last three years;• presentations to analysts and media;• annual reports;• notices of meetings;• financial data for the last three years;• the company constitution;• corporate governance policies and procedures;• codes of conduct;• historical data on dividends;• franking credits;• dividend reinvestment plan prices;• bonus issues and so on;• details on company information updates by email; and• electronic links to other relevant websites such as the share registry and the ASX.

IRA recommends that companies provide compressed pdf files on their websites and consider the useof interactive formats for online documents.83 It suggests that companies should include email alertsor RSS feeds to inform investors when a company website is updated. Finally, it notes that it isappropriate “for listed entities to include details of sell-side analysts on their websites, includingearnings-per-share forecasts and net profit after tax forecasts”, provided this is done with the consentof broking firms and a disclaimer is published.84

During February 2012, the current author selected 50 listed companies on a random basis andreviewed their websites.85 The following matters were examined:• the overall quantity and quality of the information provided on the websites;• the functionality of the websites or the ease with which information could be accessed and used;• the nature and scope of the financial information provided on the websites (including management

discussion and analysis of numbers not prepared in accordance with accounting standards);• the provision of forecast information on the websites;• the formatting of the annual reports on the websites;• access to webcasts of company briefings from the websites; and• the provision of an email notification service on the websites.

It was found that users with a reasonable understanding of online functionality could navigate most ofthe reviewed websites, albeit time was required to locate relevant information. All of the visited sitesprovided access to the annual reports and either provided the ASX announcements or a link to theASX website. However, the content provided on the websites, apart from the periodic reports andASX announcements, was highly variable. Less than half of the companies reviewed providedarchived access to any company briefings; none of the websites provided company or analyst forecastinformation; and none provided interactive communication facilities. Companies are encouraged toconsider how to more effectively use their websites to communicate with stakeholders. The websitesare a valuable tool that companies can utilise to assist parties to better understand the company’s

83 Australasian Investor Relations Association (AIRA), Best Practice Investor Relations: Guidelines for Australasian Listed

Entities (November 2010).

84 AIRA, n 83.

85 The companies were chosen using the random selection tool in EXCEL from the file of listed companies provided on the ASXwebsite at the beginning of February 2012, on a two-tiered basis. Forty of the companies were selected randomly from the listof companies included in the ASX/S&P 200, and the remaining 10 were randomly selected from companies other than those inthe top 200 index.

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operations and its reporting content and processes.86 Information should be provided online on alayered basis, in varying scope and form, to allow a broad spectrum of interested parties to access thetype and amount of information that best suits them. The websites should also enable interactivecommunication, including unfiltered question-and-answer and discussion forums.

Member meetings

There are listed Australian companies that voluntarily hold retail investor meetings in addition to theAGM. For instance, Telstra held retail investor information days throughout Australia when theNational Broadband Network deal was being negotiated with the government. The company couldhave relied on institutions (with voting capacity beyond the required majority level) to pass theresolution relating to the deal. However, the Telstra directors and managers recognised the importanceof engaging with its retail shareholder base, many of whom were existing or potential customers of thecompany.87 Personal invitations were posted to all shareholders and the meetings attracted over 100attendees in the regional centres and more than 200 in the city locations.88 These information meetingsprovided an opportunity for retail shareholders to raise questions, and they enabled the chief executiveofficer, chief financial officer and other senior management of Telstra to explain the deal in detail andrespond to questions.

The problem with tailored retail investor meetings, however, is that they reinforce a tieredcommunication structure. To overcome these issues, companies that hold specialist retail investormeetings should also provide virtual access to (and ideally participation in) all of the other meetingsthat limit physical attendance to invited participants. In an increasingly digital environment, all publiccompany investors and stakeholders should be able to attend, listen to, and participate in the meetingsor briefings that are most relevant and useful to them.

There are international company AGMs that attract broad shareholder participation and inspirehigh levels of shareholder engagement. The most well known is perhaps Berkshire Hathaway Inc, aninvestment management company in the United States. The AGMs of Berkshire Hathaway are heldover entire weekends allowing people who work during the week to attend. Over 40,000 people,including retail investors, institutional investors, analysts and media, attended the 2011 and 2012AGMs. The 2012 AGM began in the evening of Friday 4 May with a shareholder reception. OnSaturday a company movie was shown from 8.30 until 9.30 am, the question-and-answer session tookplace from 9.30 am until 3.30 pm, the business part of the meeting occurred from 3.45 to 4 pm, and inthe evening a barbeque was held. Sunday was scheduled as a shareholder shopping day.89 Importantly,Berkshire Hathaway does not discriminate between investors at the AGM or during the year withrespect to the disclosure of company information and managerial commentary and analysis. Thechairman and chief executive officer, Warren Buffett, and vice chairman, Charlie Munger, answerquestions at the AGM from institutional and retail shareholders, including advance questions selectedby journalists and those taken directly from the floor. No questions are off limits to attendees otherthan those relating to ongoing security purchases and sales.90

While some aspects of the Berkshire Hathaway AGM are difficult for other companies toreplicate, there are factors that any company can adopt or consider. Listed Australian companies couldhold an AGM on a Saturday or an evening to enable more working people to attend. Companies couldalso broaden participation during the question-and-answer period by personally inviting respectedinstitutional investors, analysts and journalists. Companies can build stakeholder loyalty andengagement by open and frank discussion at the AGM about the business operations and performance.

86 The cost involved in maintaining such information would be minimal.

87 Email from Lisa Zimmet, an investor relations representative of Telstra, to Gill North on 22 April 2012.

88 Email, n 87.

89 Berkshire Hathaway Inc, Shareholder Meeting Information, http://www.berkshirehathaway.com/sharehold.html viewed7 September 2012.

90 The author has spoken with several investors of Berkshire Hathaway Inc who have attended the AGM. They all speakpassionately about the experience.


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When a company’s directors, executives and auditors assume low levels of attendee knowledge andskill and they expect questions at the AGM that are banal, they are likely to answer accordingly. Andonce a company loses stakeholder confidence and trust, it can be difficult to regain.

Company briefings/virtual meetings

Briefings are an important means by which listed companies provide information to the market. Seniorcompany executives use the general analyst and private briefings to regularly explain and expand onthe information released through the ASX.91 The briefings also provide attendees with opportunities toquestion company management and to receive an immediate response. Listed companies are notcurrently mandated to provide open access to the general analyst briefings or to provide the marketwith transcripts of the question-and-answer sessions. Nor are they required to disclose the contentdiscussed at private briefings. Although companies are required under the ASX Listing Rules toprovide a PowerPoint summary of some of the management presentations, there is no evidence of thisrule being monitored or enforced. In any event, the content of the PowerPoint slides is not equivalentto hearing the full presentation and the subsequent question-and-answer session.

Many of the company briefings in Australia continue to be on an invitation basis only. Under thecurrent policy settings, public company directors and managers continue to have discretion todetermine who can listen in and/or participate during physical and virtual briefings beyond thosemandated under Ch 2G of the Act. This means that any party can be excluded either fully or partiallyfrom these briefings for any reason. Analysts from Goldman Sachs JB Were in Australia have admittedthat they “seek to curry favour with management in order to preserve their information networks”.92

These access concerns are supported by evidence of exclusion of analysts and investors from companybriefings and access to company managers in all jurisdictions, particularly when companies are facingadverse conditions or financial pressures.93 For instance, the handful of analysts who publiclycriticised the HIH or placed a sell recommendation on the stock were frozen out or blacklisted fromfurther contact with the company. Similarly, John Olsen, the Merrill Lynch energy market securitiesanalyst, was fired when he downgraded Enron’s stock.94 While the HIH Royal Commissionrecommended that the existing ASX guidance on blacklisting be upgraded to a full ASX ListingRule,95 this proposal has never been implemented. There are no specified criteria that provideautomatic entry onto Australian company briefing invitee lists,96 and there are no actions or remediesavailable to persons who are not invited to a briefing. In addition, there is no comprehensiveindependent source for investors and other stakeholders to know whether and when a company isholding a briefing and the access details.97

A Companies and Securities Advisory Committee Discussion Paper in 2001 suggested that privatebriefings should be the subject of future debate because, while they “may not involve disclosure of

91 See North, n 10.

92 Kohler A, “Secrets and Lies”, Business Spectator (2 December 2008), http://www.businessspectator.com.au/bs.nsf/Article/Secrets-and-lies-LWRDP?OpenDocument&src=srch viewed 3 December 2008.

93 See eg Ke B and Yu Y, “The Effect of Issuing Biased Earnings Forecasts on Analysts’ Access to Management and Survival”(2006) 44 Journal of Accounting Research 965; Langevoort D, “Investment Analysts and the Law of Insider Trading” (1990) 76Virg LR 1023; Fisch J and Sale H, “The Securities Analysts as Agent: Rethinking the Regulation of Analysts” (2003) 88 IowaL Rev 1035.

94 See Coffee J Jnr, “What Caused Enron? A Capsule of Social and Economic History of the 1990s” (2003) 89 Cornell L Rev269. See also Einhorn D, Fooling Some of the People All of the Time: A Long Short Story (John Wiley & Sons, 2008). Einhorn,the President of Greenlight Capital, indicates that he was blacklisted or excluded from Allied Capital briefings after criticisingthe company’s accounting practices.

95 Guidance Note 8 to ASX Listing Rule 3.1 states that blacklisting of qualified analysts or the provision of favoured treatmentto some analysts is inappropriate. It is not clear what the ASX contemplates by the term “qualified analysts”.

96 Invited participants may or may not be shareholders in the company, may or may not be licensed to provide financial services,and may or may not have security analysis qualifications and experience.

97 Email notification services, while fine in principle, are not always reliable. Company email lists are discretionary and they canbe, and are, regularly changed without explanation.

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inside information [they] still raise questions of fairness and equal access to corporate information”.98

The Corporations and Markets Advisory Committee (CAMAC) subsequently reviewed companybriefings in 2009. Although the title of the review, “Aspects of Market Integrity”, suggests the primaryfocus was market integrity, the ministerial reference relating to company briefings was solely focusedon efficiency concerns. CAMAC was asked by the Minister to examine the role that analyst briefingsplay in Australia’s financial markets and whether this is a positive one that leads to greater marketefficiency. CAMAC concluded that the policy settings should remain largely unchanged.99

Most of the CAMAC submissions argued for continued closed or private briefings on efficiencygrounds but none of them explained what they meant by efficiency or net efficiency.100 One efficiencyargument that the participants may have intended to highlight concerns the potential “chilling ofinformation” (or a reduction in the overall quantity and quality of information provided by listedcompanies to the market).101 A similar argument was made in the United States prior to enactment ofRegulation Fair Disclosure (Reg FD) in 2000. Reg FD mandates that when a listed public companychooses to disclose material information, the information must be disclosed broadly to the investingpublic. Companies or those acting on the company’s behalf are prohibited from selectively disclosingmaterial non-public information to securities industry professionals, institutional investors andspecified other persons. Critics of the regulation (most of whom were institutional investors orcorporate advisers) argued that retail investors would be overwhelmed by the information provided;trading activities and volatility would be significantly altered; companies would have practicaldifficulties in determining what information to release; companies would no longer be able to presenta nuanced presentation of information; and that ultimately companies would reduce the amount andquality of information provided. Empirical studies and surveys since 2000 suggest these claims wereunfounded. Scholarly studies that examine the impact of Reg FD generally find that the quantity andquality of publicly disclosed information have improved and that institutional participants haveadjusted their behaviour and trading without any significant adverse effects on the markets orcompanies.102 Indeed, the current author is not aware of any compelling global or Australian evidencewhich suggests that private or selective disclosure of material company information is broadly efficientor in the national public interest over the long run.103

Apart from ASIC, none of the submissions highlighted the potential negative effects of closed orprivate briefings or acknowledged the significant long-term benefits of transparent markets, broadaccess and public accountability. Most of the submitters argued that closed or private briefings add tothe formal information provided to the market. For instance, the Law Council of Australia submissionassumes that in the absence of private group meetings, the content disclosed at the meetings would nototherwise be released to the market. Such claims are a red herring, particularly in regulatedenvironments. The key question to consider is whether the market would be better informed and moreequitable, transparent and accountable if the information provided during private exchanges was

98 Commonwealth, Companies and Securities Advisory Committee, Insider Trading Discussion Paper (June 2001) p 2.

99 The Minister did not explain or define the term “market efficiency”.

100 Many of these arguments are made without supporting explanation or evidence. See eg Kay Review of UK Equity Markets

and Long-term Decision Making Final Report (July 2012) p 33. The report indicates (at [4.2]) that “The loose use of the word‘efficiency’ in relation to securities markets causes considerable confusion.”

101 See eg Lawrence J, “The Global Chill of Regulation FD” in “Overseas Notes: United States of America” (2000) 18 C&SLJ526. For further discussion on efficiency in financial markets, see North G and Buckley R, “A Financial Transaction Tax:Inefficient or Needed Systemic Reform?” (2012) 43 Georgetown Journal of International Law 745; North G, “ARe-examination of the Manne Efficiency Theory and the Insider Trading and Company Disclosure Efficiency Rationales” (2011)25 Australian Journal of Corporate Law 209; North G and Buckley R, “A Fundamental Re-examination of Efficiency in CapitalMarkets in Light of the Global Financial Crisis” (2010) 33 UNSWLJ 714.

102 See eg Lee C, Rosenthal L and Gleason K, “Effect of Regulation FD on Asymmetric Information” (2004) 60 Financial

Analysts Journal 79; Sinha P and Gadarowski C, “The Efficacy of Regulation Fair Disclosure” (2010) 45 Financial Review 331;Kross W and Suk I, “Does Regulation FD Work? Evidence from Analysts’ Reliance on Public Disclosure” (2012) 53 Journal of

Accounting and Economics 225.

103 For further discussion on selective disclosure, see North G, “A Theoretical Basis for Selective Disclosure Regulation” (2009)32 UNSWLJ 143; North G, Company Disclosure in Australia (Thomson Reuters, Sydney, 2013).


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accessible to the public. As Langevoort suggests, the issue of private contacts has been “too quickly… assumed away in the prevailing rhetoric” and those advocating the continued use of privatecontacts “must explain why a process of private contacts is preferable from a societal standpoint toone that forces disclosure into a more open setting”.104

The ASIC submission to the CAMAC review acknowledged there may be real and perceivedfairness issues “in relation to private briefings with well-connected analysts potentially having accessto more detailed and higher quality discussion with management”.105 Nevertheless, it concluded thatthe briefings provide a net efficiency benefit, “provided the law is complied with”106 and that access tothese briefings should remain discretionary because “[c]ompanies are best placed to determine what isthe most effective and efficient disclosure mechanism in their particular circumstances”.107 Yet asBelinda Gibson noted, the “analysts’ briefings to investors released with the annual results are oftenmore informative” than the annual reports,108 and the briefing material is “usually approved by theboard … [It] is usually prospective and looks over the company’s business model and analyses thevarious segments.”109 The ASIC reviews of the 2010 and 2011 company disclosures also noted thatthe highest-quality information was found in the investor presentations and briefing slides. This ASICcommentary highlights the issues around the quality of the public disclosures. The comment about“well-connected analysts potentially having access to more detailed and higher quality discussion withmanagement”110 is also significant. The information asymmetry arising from closed and privatebriefings is not only between retail and institutional investors, but also between the best and not sowell connected investors. Thus, the conclusion by ASIC that “[c]ompanies are best placed todetermine what is the most effective and efficient disclosure mechanism in their particularcircumstances” is difficult to reconcile with the rationales for establishing the corporate governanceand disclosure regimes in the first place.111

ASIC advises companies that to comply with the continuous disclosure obligations, materialprice-sensitive information must not be disclosed to analysts that has not been disclosed to the rest ofthe market.112 At the same time, it encourages companies to maintain an “open door” policy withanalysts.113 Australian regulators, companies and other commentators indicate or imply that thecontent discussed at closed or private company briefings is restricted to immaterial backgroundinformation or to assumptions underlying earnings forecasts but not forecasts per se. However, the

104 Langevoort D, “Investment Analysts and the Law of Insider Trading” (1990) 76 Virg LR 1023 at 1028.

105 ASIC, ASIC’s Submission on CAMAC’s Issues Paper Aspects of Market Integrity (March 2009) p 20.

106 ASIC, n 105, p 20.

107 ASIC, n 105, p 21.

108 Gibson B, “Playing by the Rules: A New Regulatory Environment is Changing the Way that Corporations Relate to Investorsand the Finance Community”, speech delivered at the AIRA Annual Conference 2009, 2 December 2009, p 11. At the time thesestatements were made, Gibson was a Commissioner at the Australian Securities and Investments Commission. She is now theDeputy Chairperson.

109 Gibson, n 108, pp 8-9.

110 ASIC, n 105, p 20.

111 See eg Commonwealth, Senate, Parliamentary Debates, Second Reading Speech, Corporate Law Reform Act (No 2) 1992,Hansard (26 November 1992) (Senator Bolkus, Minister for Administrative Services) p 3581. Senator Bolkus indicated in 1992that “[t]he government considers it essential that there be timely disclosure of relevant information about the financial positionand prospect of entities in which Australians invest. It is essential to enable informed judgments on investment decisions,whether made by individual Australians or by large institutional investors … An effective disclosure system will often be asignificant inhibition on questionable corporate conduct. Knowledge that such conduct will be quickly exposed to the glare ofpublicity, as well as criticism by shareholders and the financial press, makes it less likely to occur in the first place … Inessence, a well-informed market leads to greater investor confidence and in turn, to a greater willingness to invest in Australianbusiness.”

112 Corporations Act 2001 (Cth), ss 674-678; ASX Listing Rule 3.1; ASX, Continuous Disclosure, Guidance Note 8, ListingRule 3.1 (1 May 2013) p 27; ASIC, Better Disclosure for Investors – Guidance Rules (23 August 2000) p 2.

113 ASIC, “Heard It on the Grapevine…” Draft ASIC Guidance and Discussion Paper. Disclosure of Information to Investors

and Compliance with Continuous Disclosure and Insider Trading Provisions (November 1999) pp 6, 8; ASIC, n 112, p 2.

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proposition that all of the information provided at company briefings is immaterial and notprice-sensitive is not credible to persons with even a modicum of securities analysis experience. AIRArecommends that one-on-one and group briefings should only be conducted

to provide background to previously disclosed information. They should articulate long term strategy;organisation history, vision and goals; management philosophy, strength and depth; competitiveadvantages and risks; industry trends and issues; key profit drivers; and economic settings.114

Yet all of the information that AIRA suggests is appropriate background information is in practice thedetailed incremental information required to assess a company’s prospective earnings. Companymanagers and evidence from open access briefings confirm that briefings provide discussion onstrategy, industry trends, competitive issues, growth opportunities, future targets, and interpretation ofthe announced financial results. Most, if not all, of this information is required for informed judgmentson investment decisions and is material for rational investors. As ASIC notes:

[T]here is not always a clear line between what is price sensitive and what is not … A particular pieceof information may, when fitted together with other information … affect the company’s share price.115

While new pieces of available information may be immaterial or not price-sensitive in themselves, theadditional information may complete a mosaic of information, which as a whole constitutes materialinformation.

Similarly, the notion that participants who talk with company managers about the financial andnon-financial aspects of the business on a weekly or daily basis do not gain significant advocacy andinformational advantages over other participants who rely on the ad hoc disclosures through the ASXis not credible. AIRA confirms that many listed companies maintain their own set of earningsestimates from analysts covering the company.116 It indicates that some of these companies distributethe consensus data to brokers who seek it on a regular or informal basis and to analysts at individualmeetings. Arguments suggesting that a company that has not provided an earnings forecast or updatethrough the ASX can nevertheless discuss the accuracy and the underlying assumptions of valuationmodels without disclosing material price-sensitive information stretches any reasonable sense ofreality. As Ivor Ries, the Research Director of EL&C Ballieu, stated on the ABC program, InsideBusiness:

[m]ost [Australian] companies are very smart these days in massaging analysts’ expectations. You knowthey give you a nod and a wink and stamp their feet on the floor three times so most of the numbers willbe pretty close to what the companies report.117

AIRA fails to explain how analysts and investors without access to briefings can ensure the accuracyof their data and assumptions. While it suggests that companies could include broker and consensusestimates on their websites with the authors’ permission, no companies appear to be doing this.

Victoria Geddes confirmed in the August 2010 edition of the Company Director magazine thatwith “the exception of index and quantitative investors, most institutional investors view face-to-facemeetings with the company as an integral part of their investment process”. Geddes notes:

[I]institutional investors have unparalleled access to management through briefings, one-on-onemeetings, broker conferences, site visits and strategy days throughout the year … where companieshave issues, fund managers are not backward in seeking an audience with the chairman and managingdirector to ensure their views are heard.118

She acknowledges that “retail investors, especially sophisticated investors, have a similar need forcompany contact, but [suggests that] often the issues that concern them differ from those on the

114 AIRA, n 83.

115 ASIC, n 113.

116 AIRA, The What, When and Where of Consensus Estimates for Listed Entities in Australia (Issues Paper, February 2010)p 15.

117 Australian Broadcasting Corporation Television, “Ivor Ries with a Reporting Season Forecast”, Inside Business (19 July2009), http://www.abc.net.au/insidebusiness/content/2009/s2629947.htm viewed 2 August 2009.

118 Geddes, n 30.


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institutional agenda”.119 She notes that non-institutional investors can review copies of “presentationsgiven at briefings or conferences, transcripts of interviews with management, video interviews, as wellas the statutory disclosures”.120

Geddes does not explain how the concerns of retail and institutional investors differ. She alsocarefully sidesteps the issue of differential investor access to company managers and information byimplying that publically available company information is generally extensive. However, as previouslydiscussed, a significant proportion of the high-quality information required for securities valuation inAustralia is provided at company briefings, particularly during result periods. The result briefingstypically provide significant management discussion and analysis of the financial and non-financialaspects of the released results and the company outlook. Consequently, the information provided toinvestors with regular company briefing access is significantly richer than the information mosaicsprovided in the public arena.

Key issues around open access to company briefings in Australia remain unresolved. The onusremains on Australian policy-makers and regulators to explain why public companies are not requiredto provide open access to all company briefings; how investors and stakeholders without access to theregular and substantive information provided at private briefings can make well-informed decisionsand hold company directors and managers to account; and how policies that allow regular private orclosed company briefings optimise economic outcomes in Australia and ultimately benefit the publicinterest, rather than simply the interests and profits of the invited participants.

CAMAC and policy-makers should consider whether public company communication processesand practices that effectively bifurcate favoured participants from other shareholders and stakeholdersare likely to serve the best interests of the individual companies and the nation. In practice, AGMresolutions have generally been discussed with major institutional shareholders, the votes of theinstitutions have generally been submitted prior to the meetings, and the institutional shareholders donot generally attend AGMs. Company executives and institutional participants naturally prefer to meetprivately to discuss company developments and operational matters because the private exchangeslimit public accountability and they provide the attendees with relative advocacy and informationaladvantages.

AIRA indicates that it is encouraging companies to open up company briefings to retailshareholders and that it is working with the ASX Corporate Governance Council to make briefingsmore accessible by means of webcasts. While all of these steps are to be welcomed, it is doubtful thatvoluntary persuasion will ever overcome the natural managerial reluctance to communicate publiclywhen the company environment, specific events or management issues turn sour. Indeed, a policyframework that allows company directors and managers operating within mandatory disclosure andgovernance environments to retain most of the discretion that existed under a voluntary disclosureenvironment, and to limit the scope and quality of the public disclosures, arguably results in the worstpossible outcomes. In such an environment, the conflicts that the regulation is intended to mitigateremain largely hidden from public view. In addition, the existence of the regulatory frameworksenables company managers and the institutional community to espouse the benefits of transparencyand equal access while simultaneously holding onto their advantaged and often conflicted positions.121

It is vital that company policy debates acknowledge the vested interests and incentives of theparticipants involved. Berle and Means argued in the 1930s that shareholder power is determinedprimarily through control rather than through contractual rights. They suggested that

control lies in the hands of the individual or group who have the actual power to select the board ofdirectors (or its majority) … In most cases … if one can determine who does actually have power to

119 Geddes, n 30.

120 Geddes, n 30.

121 See North, n 103 (2009).

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select the directors, one has located the group of individuals who for practical purposes may beregarded as the “control”.122

This notion of control should be viewed as an essential thread within all listed company governanceand communication debates. As a group, institutional investors generally hold majority stakes in listedAustralian companies and for practical purposes therefore have “control” of these companies. Inaddition, there are only a small number of large fund managers, so the institutional holdings in manycompanies are concentrated. When this occurs, companies can manage their governance andcommunication structures and content by satisfying the demands of a few large institutional investors.

Corporate governance and disclosure policies and practices result from political processes andcompromise. Each constituency uses democratic processes to lobby for a regulatory environment thatputs it in the best position. Company managers prefer to retain total discretion over governance andcommunication processes. Managers have compelling monetary and other incentives to restrict or todelay public communication and discourse, particularly when the relevant matters involve negativenews or conflicts between the manager and corporate interests. Even in regulated governance anddisclosure environments, managers can limit public communication and accountability to a level thatsatisfies the minimum regulatory standards. In addition, the largest institutions, or those withprivileged access to company managers and information, are clearly incentivised to resist reforms thatdiminish their superior position, and so they lobby for regulatory outcomes that enable continuedprivate access. Other corporate investors and stakeholders call for rules to ensure they have a voiceand are provided with an equitable playing field. The persons in the most vulnerable position in theongoing power struggle are retail investors and those in the community who are or may be adverselyaffected by corporate developments.123

Many submissions to corporate policy reviews imply that the increasing demands frominstitutions for private company briefings are reasonable on the basis that these participants requireregular access to information to assist with security valuation. For instance, most of the argumentsmade to the Engagement Committee assumed that all institutional investors are sophisticatedprofessionals who understand and are engaged with listed company matters and concerns. In contrast,retail investors are presented as free riders,124 apathic,125 overwhelmed by the information provided inthe public arena,126 not willing or able to read the financial or non-financial information provided tothem under the mandatory disclosure processes,127 and not able to understand company issues or valuecompany securities. It is also claimed that retail investors ask only mundane questions at the AGM.128

Such investor categorisations and views are overly simplistic and patronising and the burying of suchnotions is long overdue. Not all institutional participants are well informed about company matters,not all are diligent researchers, and some are not qualified or experienced analysts. Conversely, someindividual investors and stakeholders have extensive business experience, are diligent researchers,well informed, and are able to understand and utilise financial and non-financial information in theirdecision-making.129 The size of a person’s investment in a company, whether large or small, may bearlittle or no correlation to the ability or diligence of the investor. To be clear, the current author is not

122 Berle A and Means G, The Modern Corporation and Private Property (Transaction Publishers, 1932) pp 66-67.

123 Listed companies regularly meet with representatives from the Australian Shareholders Association. While this practice isappropriate to enable discussion of general corporate governance matters, the contents of these meetings are not reported in thepublic arena. Consequently, these private meetings do not assist retail investors, as individuals or as a body, to makewell-informed investment decisions on a timely basis, nor are they equivalent to private briefings with individual institutionalinvestors.

124 Engagement Report, n 2, p 21, citing Treasury, Submission 17, p 5.

125 Engagement Report, n 2, pp 20-21, citing Novak and McCabe, Submission 5, pp 1-2.


127 Engagement Report, n 2, p 22, citing Chartered Secretaries Australia, Submission 8, p 5, and AICD, Submission 25, p 49.

128 Mace, n 9.

129 See eg AIRA, 2010 AIRA Electronic Communications Survey – Use of Electronic Communications and Social Media by

Retail Investors in Australia and New Zealand (2010).


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asserting that all institutional participants are poorly informed or lazy, or that all retail investors areexperienced analysts. The key point is that both institutional and retail investors fit within broad anddiversified spectrums. The usefulness of descriptions such as “rational apathy” and “free riders” islimited and these phrases should be applied to classes of investors with care. Too often it is assumedthat these descriptions do not apply to any institutional investors, while they broadly apply to all retailinvestors and other company stakeholders. Once again, these frameworks are unduly simplistic andconvenient. Sweeping generalisations about institutional and retail investors inevitably mask the truelayering of professionalism, competency and diligence across both groups. There are manywell-informed, experienced and astute retail shareholders who are willing to meaningfully engage withcompanies, given a reasonable opportunity to do so.130

In 2004, the Business Council of Australia and the Australian Institute of Company Directorsissued a discussion paper entitled Fresh Approaches to Communication Between Companies and TheirShareholders. The executive summary states:

Shareholders, the wider community and our politicians have questioned the quality of Australia’scorporate governance and demanded reform to rebuild trust in the corporate sector … Improvedcommunication between companies and their shareholders, particularly their retail shareholders, isessential if the wider community is to be convinced that the vast majority of company directors andexecutives are highly-skilled and competent individuals focused on growing the wealth of shareholders.

The paper canvasses a range of ideas and proposals. These include:• the holding of regular shareholder meetings as an alternative means of engaging with

shareholders;• allowing retail shareholders to participate in the “road shows” undertaken for institutional

investors and analysts;• webcasting of company briefings on a live and archived basis; and• the enabling of interactive communication on company websites.

The paper concludes that “current practices ‘may need to be re thought or re-energised’ due toincreasing shareholder numbers, heightened interest in the performance of listed companies and theintroduction of new communication technologies”.131 While the arguments and recommendations inthe paper are sound, independent reviews of corporate communications suggest the canvassedproposals remain largely aspirational.

The arrival of the digital era undoubtedly alters the equal access debate and challenges many ofthe traditional market and financial intermediary assumptions. Of course, there are many investorswho require professional assistance because of a lack of skills, resources or time. This means there isa continued role for analysts or professional intermediaries who are genuinely skilled at spottingarbitrage opportunities or who can provide a valued service to these clients. However, there is also agrowing proportion of the Australian population that, for many reasons, prefers to invest on anindependent basis, with or without assistance from third parties.132 Given the high levels of direct andindirect investment in Australian corporate securities, the expanding scope of the compulsorysuperannuation scheme, and the rapid growth in the number and significance of self-managedsuperannuation funds, it is essential that policy-makers ensure that the public company governanceand communication processes are regular, comprehensive and delivered through public mechanisms.Policy settings that discretely divide investors into institutional or retail categories create, reinforceand strengthen hierarchical governance and disclosure structures and processes, with the associatedconflicts of interest, public accountability and information asymmetry concerns.

It is critically important for policy-makers, scholars and practitioners to understand the extent towhich Australian companies have voluntarily adopted digital means to broaden their governance and

130 For example, the author has actively engaged with many listed companies over various practices. She has also advocated forenhanced listed company disclosure for many years on an unfunded basis, despite the fact that economists (and others) wouldlikely represent this behaviour as irrational.

131 Mace, n 9.

132 Australian Securities Exchange, 2010 Australian Share Ownership Study (2011).

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disclosure audiences, and to enhance the quality of the public discourse. Recent reviews of listedcompany communications suggest that all companies have rapidly embraced digital means todisseminate the mandated periodic reports and the continuous disclosures. In addition, mostcompanies, through the registry services, encourage investors on a regular basis to opt to receiveadministrative notices by email. However, many of these same companies have been slow to adoptavailable digital processes to improve the timeliness and quality of their public reporting and toestablish regular interactive communication with stakeholders beyond the core institutional group.

Any changes to AGMs and annual reports, including moves to virtual meetings and digitalformats, should be considered within the totality of the full disclosure framework. Furthermore, thesechanges should be considered primarily from the perspective of the users of public company reportsand disclosures. Otherwise, the rationales for maintaining the company disclosure regimes are open toquestion.

CONCLUSION

In the modern digital era, issues relating to AGMs should be considered as part of the integratedpublic company governance and communication debates. When the role and practice of AGMs areconsidered as a discrete area, the debate and any proposed reforms are inherently superficial andvexed, because these meetings occur only once a year, attendance is limited to what are oftenpatronisingly termed “mum and dad” investors, and the meetings are viewed by some companydirectors as merely a duty to be endured.

Fundamental changes to corporate policy and practices in Australia are required to enablemeaningful public company accountability on a sustained basis. Policy-makers, scholars andpractitioners should seriously question many of the key assumptions underpinning the currenthierarchical and largely discretionary governance and communication structures. Public policy thatactively encourages informal corporate and institutional contacts while simultaneously advocatinghigh levels of transparency, accountability and equal access is at best uneasy. Corporate governanceand communication frameworks that are predominantly founded on private meetings, with attendeesselected on a discretionary basis by company managers, encompass obvious conflicts of interest andare unlikely to provide optimal corporate or national outcomes. When private communicationsbetween company managers and selected investors are regular and substantive, the risks of misconductand poor regulatory outcomes increase significantly. The global financial crisis clearly highlighted theexternalities that can arise when market activity encompasses conflicts of interest, short-term profitincentives, poor market transparency, information asymmetry, a lack of regulatory oversight, and weakgovernance controls. Hence, Australian policy-makers need to ensure that more of the substance oflisted company communication and governance content occurs in the public arena to enable broad androbust engagement and accountability. Meaningful and effective listed company governance anddisclosure frameworks in the 21st century can only be established when company communicationtakes place through non-discriminatory mechanisms that allow broad public access and scrutiny.

Some company director and institutional bodies argue that reforms to ensure broadercommunication and governance structures are not necessary. This is not surprising, as theserepresentative associations exist to represent the best interests of their members. However, theAustralian equity market operates with close to the highest retail investor participation in the world,133

most of the growing national savings pool is invested through compulsory superannuation, and a largeportion of the compulsory superannuation moneys is invested in equities.134 Policy-makers and otherindependent commentators must therefore question policies, arguments and practices founded onsimplistic notions that all retail shareholders and other stakeholders are unsophisticated, uninformedand incapable of utilising company information, and thus not able to be usefully engaged or involvedin governance issues.135 Fixed ideas relating to “the proper distinctions between professional and

133 Australian Securities Exchange, n 132, p 30.

134 Butler B, “Super Boss Defends Heavy Investment in Shares”, Sydney Morning Herald (Sydney) (10 April 2012).

135 See eg Engagement Report, n 2, p 20, citing Kevin McCann, AICD, Committee Hansard, Sydney (16 April 2008) p 58.


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non-professional [and] between sophisticated and unsophisticated” participants pose a significantbarrier to transparent, competitive and accountable capital markets.136 Company managers,policy-makers and regulators should not predetermine what governance or disclosure matters shouldbe aired in the public arena based on preconceived notions of what persons are capable of or areinterested in. As Justice Owen indicated in the HIH Royal Commission Report, good corporategovernance is about the “fundamental notions of openness, integrity and accountability”.137

“Whatever the [corporate] model [adopted], the public must know about it and about how it isoperating in practice.”138

There is overwhelming evidence that capital markets work most efficiently and fairly in highlytransparent environments with broad participation. Communication in the public sphere and publicscrutiny and accountability are needed to enable established company, institutional and communitychecks and balances to operate effectively, to discourage institutional and individual excesses thathistory and recent experience tell us arise when greed runs rampant, and to promote genuinelycompetitive markets. The statement by Louis Brandeis that “sunlight is said to be the best ofdisinfectants; electric light the most efficient policeman”139 is often cited by scholars and regulators,but his more substantive arguments concerning the need for company disclosure to be “real” and theimportance of publicity as a continuous remedial measure are not sufficiently acknowledged.140

Lest we forget, companies are legal constructs that operate in society with the associated rights,obligations and benefits determined by the Parliament. In Australia, limited liability companies canelect to register as private or public.141 Private companies (defined as “proprietary companies” underthe Act) can raise capital provided they limit the source of funds to employees or no more than 50non-employee shareholders and they do not engage in conduct that would require disclosure toinvestors under the fundraising requirements in Ch 6D of the Act.142 When a company wishes tobroaden its capital base beyond these limits, it must register as public. As Theodore Roosevelt statedin 1901:

[G]reat companies exist only because they are created and safeguarded by our institutions; and it is ourright and our duty to see that they work in harmony with these institutions. The first requisite isknowledge, full and complete; knowledge which may be made public to the world.143

It is time that public corporations in Australia are seen to be, and in practice operate as, “public”companies. The digital and informational world we live in allows and requires us to move beyondone-size-fits-all public company communication solutions. Digital technologies allow for wonderfullyinnovative, timely and layered solutions for a broad spectrum of company stakeholders with differingneeds, capacities and time. Companies can easily provide information in convenient segments, and ona real-time and archived basis, to allow people to access it in a form and at a time that best suits them.Listed companies have many low-cost, non-discriminatory communication processes, including theASX company announcement platform, company websites, open invitation physical and virtualmeetings, teleconference calls and social networks. Jurisdictions that seek to optimise their regulatoryframeworks must ensure that these digital forms of communication are fully harnessed to enable allcorporate stakeholders to engage on an informed and interactive basis with company directors andmanagers, not only at AGMs but also on a regular and non-discriminatory basis throughout the year.

136 Bradley C, “Disorderly Conduct: Day Traders and the Ideology of ‘Fair and Orderly Markets’” (2000) 26 Journal of

Corporation Law 63 at 96.

137 Commonwealth, HIH Royal Commission, The Failure of HIH Insurance (2003) Vol 1, Pt 3, s 6.6.

138 Commonwealth, HIH Royal Commission, n 137, Vol 1, Pt 3, s 6.6.

139 Brandeis L, Other People’s Money ((National Home Library Foundation, Washington, 1914) p 62.

140 Brandeis, n 139, C V.

141 Corporations Act 2001 (Cth), ss 117-118.

142 Corporations Act 2001 (Cth), s 113.

143 Roosevelt, Theodore, State of the Union Message to Congress (3 December 1901).

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Documents

University of Western Australia - the UWA Profiles and ... › files › ... · University of Western Australia-Faculty of Law Research Paper No. 2013-33 ... The annual general meeting