Acting for You, September 2021

Important bill on virtual AGMs passes into law 

Governance Institute members have successfully argued for extended temporary relief on virtual AGMs and electronic execution following a major advocacy campaign. Treasury Laws Amendment (2021 Measures No. 1) Bill 2021 passed both houses of Parliament on 10 August and received royal assent on 13 August.

The legislation provides a measure of certainty for organisations affected by the continuing COVID-19 pandemic as they prepare for this year’s peak AGM season. The expiry date has been extended until 31 March 2022, rather than September this year as originally proposed. 

Key measures: 

  • The new law allows the use of hybrid and virtual-only AGMs until the March expiry date, even where an entity’s constitution does not expressly allow it. 
  • Entities will not be required to notify members of their rights to elect to receive meeting-related documents in hard copy, as originally proposed. 
  • Shareholders and members attending hybrid and virtual-only meetings may elect to speak and ask questions orally rather than in writing — meaning companies will need to facilitate telephone lines or live microphones through online platforms. 
  • ASIC has new emergency powers to grant temporary class order relief to entities from the requirements to hold AGMs at a physical location (when their constitutions do not allow virtual or hybrid meetings) and to give AGM-related documents to shareholders in hard copy in special circumstances. The Government says there will be no need for ASIC to exercise these powers until after the Act expires. 
  • Documents may be executed by companies electronically under Section 127 of the Corporations Act until the March expiry date. 
  • introduces a fault element for civil penalty proceedings commenced against directors and companies for alleged continuous disclosure breaches.   

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