AICD welcomes ASIC’s new guidance for AGM requirements

Friday, 20 March 2020

The Australian Institute of Company Directors (AICD) has strongly welcomed the Australian Securities and Investments Commission’s (ASIC) relaxing of AGM requirements, in light of concerns around the spread of COVID-19.

Companies and regulators are anticipating a disruption to this year’s AGM season, with restrictions on large gatherings, travel restrictions and social distancing measures in place.

Today ASIC announced that they will take no action if AGMs are postponed for two months (until the end of July) and will support the use of appropriate technology to hold hybrid or virtual AGMs, where permitted under a company’s constitution and provided shareholders are afforded a reasonable opportunity to participate.

AICD CEO and Managing Director, Angus Armour, said, “These are extraordinary times and extraordinary measures are needed.

“The pragmatic measures announced by ASIC today will provide some relief to companies who are faced with organising their meetings under these unprecedented circumstances. We would like to thank ASIC for working quickly and constructively with stakeholders at this time.”

While these measures are welcome, ASIC currently does not have the power under the Corporations Act to enable fully virtual AGMs.

“The Federal Government should prioritise legislative reform to enable virtual AGMs given it is not yet known how long current public health restrictions will be in place.

“Governments at all levels must act swiftly to resolve urgent regulatory issues in the COVID-19 environment. ASIC's step on AGM's is a welcome example of an approach that must be rolled out more widely. Governments and regulators must reduce the compliance burden on organisations in the short-term, deferring new obligations, extending reporting timeframes and providing 'no action' to support organisations dealing with the uncertain COVID-19 environment”, Mr Armour said.

The AICD will continue to discuss with government options for urgent regulatory measures in response to the COVID-19 environment.

Media Contact: Maegen Sykes 0439 167 567

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