Virtual AGMs and e-signatures here to stay? Governance Institute welcomes Senate Committee recommendations on “long overdue” reforms
Having advocated strongly on these issues, Governance Institute of Australia has welcomed a Senate Committee report into the use of Financial Technology and Regulatory Technology, saying three key recommendations will be of particular interest to organisations during the current unpredictable times:
1. Allowing companies to hold their AGM or other meetings virtually, in-person, or in a hybrid format.
“Measures allowing virtual meetings were introduced during COVID-19 but these were only temporary which had led to a great deal of uncertainty and anxiety,” CEO of Governance Institute Megan Motto said.
“The Committee’s recommendation that these become a permanent part of the landscape would mean companies could decide the format for their meetings that works best for them while ensuring the needs of stakeholders are met.”
2. Companies allowed to communicate with shareholders electronically - by default.
“While shareholders can still request paper-based communications, this step would streamline and speed up communications. It would allow for key items to be communicated quickly – an important consideration given the fast-changing times that we are in,” Ms Motto said.
“There has been a significant uptake in electronic communication during COVID-19 – and it’s important we do not take a backward step to hard copy.”
3. Electronic signature and execution of legal documents allowed.
“Given ongoing physical distancing requirements – which are likely to be in place until a vaccine is released – this would be a sensible and practical initiative that is a major part of reforming Australia’s digital communications.”
These three recommendations would require amendments to the Corporations Act, legislation the Governance Institute has argued is “mired in the 19th century.”
“In its current form, the Corporations Act simply does not contemplate the use of technology. These changes are long overdue and would be hugely significant for industry as it grapples with the unchartered waters of 2020 and beyond while trying to map their way to recovery,” Ms Motto said.
Governance Institute made these recommendations as part of a submission to the Senate Select Committee on the use of technology by business during the COVID-19 crisis, and Ms Motto recently addressed the Senate Select Committee on Financial Technology and Regulatory Technology, outlining how changes to the Corporations Act were required to make it fit for purpose.
“We are delighted the Committee was persuaded by our submission and our evidence and we look forward to the next steps in this process,” Ms Motto said.