26 Apr 2018
Protecting your interests as a shareholder at shareholder meetings
By Rory Moriarty, Rod Halstead
With the right knowledge, shareholders can achieve real change and ensure their concerns are not only heard, but addressed.
A shareholder meeting is an opportunity for activist shareholders to push for change and press their concerns through a variety of different mechanisms with the support of other shareholders. Unfortunately, these opportunities can be wasted or diminished due to lack of planning or a failure to understand the nuanced governance of shareholder meetings and the particular company.
You can maximise your impact as a shareholder at shareholder meetings and better assert your interests by thinking ahead and doing some ground work. For example:
- Should you wait for the AGM, should you request a meeting from the directors or should you convene the meeting yourself? You need to know which option is right for you and what can you achieve at each of those meetings and how.
- Do your homework on understanding the use of the share register and the role of proxy advisors.
- Utilise proxies, proxy forms and corporate representatives to assert your interests at the meeting and persuade other shareholders to vote in a particular way.
- Keep your house in order by knowing what can and can't be said at or in the lead up to meetings at which contested matters will be decided. It is also useful to know what the company can say to its shareholders.
- Be on top of meeting governance and know what action can be taken and when. For example, understand what is involved when seeking a poll, involving, scrutineers or seeking postponement and adjournment.
- Follow through on ensuring everything that was agreed to be done at the meeting is done. For example, change of directors, change to the constitution, and any steps to be taken by the new Board.
- Know what procedural defects in shareholders' meetings be rectified. Can validation of irregularities in shareholding meetings automatically or only at the discretion of the Court?
Being a proactive shareholder requires planning and diligence. With the right knowledge, shareholders can achieve real change and ensure their concerns are not only heard, but addressed.
What should you do?
If you have any questions about any of the issues outlined above, or need specific advice relevant to a Shareholder meeting in the future, get in touch with Rory Moriarty or Rod Halstead.
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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.