Report 609 builds on last year’s report, which was the first of its kind to provide ASIC observations on the specific AGM season.
ASIC’s observations confirm a trend from the 2017 season where shareholder engagement remained significant with the AGM used as an avenue of direct engagement with company boards.
The 2018 AGM season was also conducted in unique circumstances as the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry drew attention to particular companies and directors and heightened shareholder focus on matters such as social licence to operate and community expectations.
Key observations from Report 609 include:
- Emerging theme of accountability from boards:
- shareholders have used their votes on the remuneration report to demonstrate discontent with boards more broadly rather than just on executive remuneration; and
- several chairpersons and CEOs used their opening addresses at AGMs to acknowledge failings or mistakes made by the company and commitment to improving.Executive remuneration was topical, with an increase in the number of remuneration strikes accompanied by an upsurge in the magnitude of ‘against’ votes on remuneration reports.
- Remuneration reports that received a strike were not limited to remuneration amount or structure but were used to show discontent with share price performance and other conduct issues.
- Environmental, Social and Governance (ESG) issues continued to attract shareholder attention with climate change risk and sustainability emerging as the most frequently raised ESG issue.
- Overall improvement on gender diversity with women accounting for 30% of board members on ASX100 boards.
