Annual general meetings (AGMs) should be revamped to fix broken elements of the system, according to industry leaders at the Australian Council of Superannuation Investors conference.
Directors' remarks are too heavily scripted and the law needs to be changed to allow boards to say things at the AGM that won't be heavily vetted, according to director of QBE and WorleyParsons John Green.
If AGMs are going to be more about things that matter to shareholders, then boards need comfort that they can tell shareholders something based on reasonable belief without fear that they will be sued, he said.
The bulk of the AGM was formal scripted speeches restricted to a few people, addressing only certain concerns, while other directors' opinions were unknown because they say nothing during the meeting, Green said.
Advance questions by shareholders should also be sent in so the board can tailor their speech to those concerns, he said.
These were his personal views and not those of the company he represents, Green said.
The "show of hands" type of voting at AGMs also needs to be dropped, because only a minor percentage of shareholders show up and therefore it was hardly representative, he said.
There are falling numbers of shareholders attending AGMs, Green said.
Information about company results was often put up online months before the AGM, so it was no surprise that no one came, he added.
Chief executive of Chartered Secretaries of Australia Tim Sheehy said poll voting and direct voting should be mandated, and no voting should take place at the AGM.
A show of hands doesn't sway the vote, he said.
Sheey also suggested that companies below the ASX300 should not be expected to hold an AGM, and companies should also be allowed to hold meetings at any time during a 12 month period, he said.
AGMs fails miserably on both counts of communication and decision making, he said.
