15. Board engagement with shareholders

Question 1

How should listed companies engage with shareholders?

Answer 1

• The chair should seek regular engagement with major shareholders in order to understand their views on governance and performance against the company’s strategy
• Chair of board committees should seek engagement with shareholders on significant matters related to their areas of responsibility
• The SID, when called upon, should meet a sufficient range of major shareholders to develop a balanced understanding of their views
• Boards should consider additional ways to engage with smaller shareholders e.g. roundtables and webinars

Question 2

What does the ICSA Guidance on ‘Enhancing Stewardship Dialogue’ say?

Answer 2

1. Develop an engagement strategy – refer to it in annual report – combination of one-to-one meetings with the largest shareholders and group meetings for a number of smaller investors
2. Get the housekeeping right – invite the ‘right people’ to meetings
3. Investors will likely vote at the AGM based on discussions at meetings – therefore, gives directors time to work further
4. Strengthen the conversation – consider letting executive directors leave at certain intervals of meetings
5. Provide feedback

Question 3

How can a chair be prepared for an AGM?

Answer 3

co-sec should ensure that the chair is fully briefed on any potential questions – book of Q&As based on recurring questions should have been sent to the chair – maybe hold a dress rehearsal with the chair

Question 4

When should proxy votes be disclosed at an AGM?

Answer 4

made available as soon as possible and on website

Question 5

Why should proxy forms include a ‘vote withheld box’ for each resolution?

Answer 5

allows them to indicate displeasure – will not count towards proportion of votes

Question 6

How has the CA2006 incorporated electronic communications into law?

Answer 6

• Documents and information are now able to be sent by or to companies either in hard copy or electronic form. Under the DTR rules, companies need to obtain a shareholder resolution for communications to be sent by email or fax
• Companies are also permitted to communicate via website (if shareholder has not opted out)
• Shareholders always have the right to ask for a hard copy of the communications they receive electronically