AICD Review

Shareholder democracy; Sizzling time had by all; Rethinking the Corporations Law; WA Residential Program.

Shareholder democracy

The Companies & Securities Advisory Committee (CASAC) has finished its report on "Shareholder Participation in the Modern Listed Public Company" and submitted its findings to the Government. CASAC was established under Part 9 of the Australian Securities and Investments Commission Act 1989 to advise government on a range of corporation law matters. CASAC recommends the following amendments to the Corporations Law for publicly-listed companies:

Requisitioning of a meeting - Only shareholders who, collectively, have at least 5 percent of the votes that may be cast at a general meeting should have the power to requisition a general meeting of a listed public company.

Threshold for proposing resolutions - The right of 100 shareholders to move resolutions at meetings of listed public companies should remain. However, each of these 100 shareholders should be required to hold shares of a meaningful value, say, $1000.

Notice of next annual general meeting - Listed public companies should be required to give the relevant Exchange at least three months' notice of the date of their next annual general meeting. This requirement should be in the Corporations Law unless included in the Listing Rules of the relevant Exchanges.

Body corporate as a proxy - Shareholders should be permitted to appoint a body corporate as their proxy.

Obligation of board proxy to vote - Any person put forward by the company board as a proxy should be required to vote the proxies on any poll.

Disclosing proxy voting details in the minutes for resolutions decided by poll - Where a resolution is decided by poll, the minutes of the meeting should only be required to disclose the votes cast for, against and abstaining on the resolution.

Access to proxy voting information - Any shareholders who between them have at least 5 percent of the issued voting shares should be entitled to inspect proxy documentation for a period of 48 hours after the conclusion of the general meeting.

Direct absentee voting - the directors of a publicly listed company should have the power (subject to any restriction in the company's constitution) to provide that shareholders may, as an alternative to voting in person or by proxy, cast postal or electronic votes on any matters arising to consideration at a general meeting.

The CASAC report also recommends that the ASX consider listing rules covering:

• • an independent person receiving and collating proxy votes;
  • including procedure for electing directors in the notice of any relevant shareholder meeting and indicating how procedures fit within equal opportunity and majority vote principles;
  • a single simultaneous ballot to a model form for voting on the election of directors.

The CASAC advisory committee specifically opposes non-binding resolutions by shareholders on matters outside their constitutional powers. It also opposes post-meeting voting unless it is within a stipulated period and mandatory cumulative voting for directors the election of directors in that shareholders have a statutory right to vote their shares multiple times up to the number of director vacancies to be filled. CASAC believes no legislative action is needed in:

• • shareholder access to corporate information;
  • information to be contained in a notice of meeting;
  • notice to beneficial shareholders;
  • proxy solicitations;
  • irrevocable proxies;
  • disclosing proxy voting details prior to the meeting;
  • disclosing proxy voting details prior to debate at the meeting;
  • disclosing proxy voting details in the minutes of the meeting for resolutions decided by show of hands;
  • institutional shareholders attending or voting at meetings.

Sizzling time had by all

Wayne Bos, acting CEO of Sausage Software; Suzie Ferrari, Victorian manager of PowerTel; and Carey Cox, AICD Victoria Division manager at the 4 July luncheon for 200 members and guests. The speech was stimulating as Bos told of his experience in "putting the sizzle back into Sausage". He stressed that action was imperative, rather than words. Question time was animated - and not without controversy - as Bos ably fielded the views and enquiries of the audience.

Rethinking the Corporations Law

The uncertainty created by the High Court decision in the Queen vs Hughes in terms of State versus Federal Government responsibility for the Corporations Law took a tentative step closer to resolution following last month's decision by State Attorneys-General to recommend referral to Commonwealth jurisdiction.

South Australia and Western Australia have been reluctant to refer Corporation Law powers to the Federal Government using the bogey of state rights as the rationale and there was a call to have a national referendum on the issue. The cost and the period of uncertainty created by a resolution option was rejected out of hand by the Federal Government. AICD was part of the Coalition for Certainty in Corporate Regulation (along with the Law Council, the Securities Institute, the Institute of Chartered Accountants, the Investment and Financial Services Association and the Business Council of Australia) that successfully lobbied the Government and States on the issue. However, it is not a done deal until ALL states have drafted and passed a referral bill.

AICD's new Vice-President

Dr Kenneth J Moss, former managing director of Howard Smith Ltd has been appointed to the National Council of the AICD as vice-president. Moss is also chairman of Boral Ltd.

Born in Newcastle in 1945, Moss holds a Bachelor of Engineering (Hons) and is a Doctor of Philosophy in Mechanical Engineering (University of Newcastle). He was initially employed as a trainee at BHP's Newcastle steelworks in 1963 and transferred to BHP Colleries in 1965. He joined the Howard Smith Group in 1974 at A. Goninan & Co as manager mining equipment. He became sales manager in 1979 and deputy chief general manager in 1983. Following a brief stint in the UK managing the North British Maritime Group (an acquisition of Goninan's), he returned to Australia in 1989 as general manager corporate operations, the Howard Smith Group. He was appointed deputy chief executive in 1991 and managing director in 1993. Howard Smith is a large diversified Australian public company with a market capitalisation of $2.4 billion and a turnover of $2.6 billion. It employs 12,950 people in Australia, New Zealand, UK, Fiji and PNG. Moss is a Fellow of the AICD as well as a Fellow of the Institution of Engineers, Australia. His interests include cricket, football, classical music and medieval history.

WA Residential Program

Following on from the great success of last year's inaugural program, the Company Directors Course Residential Program was again held in Perth in July at the Joondalup Resort Hotel. The Fireside Briefing was given by Ron Cohen FAICD, former winner of the 1997 WA Gold Medal Award for WA Director of the Year. Cohen is currently a director of Foodland Associated, Aerodata Holdings and Burswood. The Residential Program in Western Australia is now an integral part of the AICD's national education curriculum.

Disclaimer

The purpose of this database is to provide a full-text record of all articles that have appeared in the CDJ since February 1997. It is aimed to assist in the research and reference process. The database has a full-text index and will enable articles to be easily retrieved.It should be noted that information contained in this database is in pre-publication format only - IT IS NOT THE FINAL PRINTED VERSION OF THE CDJ - therefore there might be slight discrepancies between the contents of this database and the printed CDJ.