James Stevens (Sturt, Liberal Party) Share this | Hansard source

I rise to support the second reading of the Corporations Amendment (Meetings and Documents) Bill 2021, which has two core elements to it. Obviously, we've learned a lot in the last two years about how rapidly you can change and adapt to circumstances that unexpectedly befall you—that has been the case across the planet in so many ways because of the coronavirus pandemic—and how so many everyday things in our lives had to change almost instantaneously as we put in place health measures and restrictions to protect people from a health point of view but equally with far-reaching consequences for our economy and for our society. It is nice to be at the point now—with some trepidation due to the news in recent days—that we continue in this nation to open up economically and shed some of the final restrictions that have had to be in place for so long as we have managed the health challenges of the COVID-19 pandemic.

This is a bill, of course, that I suppose is very much from the experience that we had in responding to the pandemic. Like many other things, it's something that maybe now in hindsight we are surprised that we hadn't already addressed. Maybe, in hindsight, it does seem surprising that we hadn't already sought opportunities to undertake these kinds of progressive reforms, which in my judgement will certainly make administration for businesses a lot easier, a lot more relevant and a lot more modern. Equally, I think it will provide much greater transparency and access to information for people who should be entitled to that—namely, shareholders.

The first part of the bill is fairly straightforward and I don't think requires much dwelling upon. It is about expanding the way in which you can execute the signing of documents. What's being proposed here to allow companies to do that in more digitally friendly ways seems like the sort of reform that we would've been looking at regardless of health pandemics and those experiences, and I welcome the fact that the learning of the last two years around this sort of reform is fairly straightforward. To me, through the consultation that the minister has done on these changes and the experience that people have had through the temporary measures that were put in place, there has been no suggestion in any way that these changes are of any concern. Certainly, I think they will bring about a great deal of efficiency in the various legislative processes that are required for people to satisfy their governance requirements under the Corporations Act. I think that makes a lot of sense, and I don't think anyone has disputed that.

The second part of this bill is, of course, providing more flexibility and more options for the holding of meetings, particularly the annual general meetings of companies. I've certainly been to a lot of annual general meetings in my time as a member of the Liberal Party, but I will be honest and say I can't recall ever attending the annual general meeting of a corporation. I've certainly attended the annual general meetings of community groups et cetera, but I've not been to one as a shareholder despite being a shareholder in various ways throughout the entirety of my adult life and even before than that. My parents were very strong on financial education, and I became a shareholder at the very young age of 11 or 12. I remember having an interest in the processes of the way in which public companies, in particular, operated, but I never felt compelled to attend the annual general meeting of any of the companies I had a shareholding in.

However, I do remember always having the opportunity, always being invited. Although, living in Adelaide, it was never that much of a practical consideration, whether it was a shareholder like me or anyone else, to make the dedicated commitment to travelling to, perhaps, Sydney or Melbourne where the company was holding that annual general meeting to attend it. Of course, the other communications, the annual report of the business, the notice of meeting et cetera, gave you in some ways enough of an understanding of what was going to transpire there. The important thing is that I always knew, like any shareholder knows, that I had the opportunity, if I wanted to and if I could, to access the annual general meeting, and at that annual general meeting I might have the opportunity to ask some questions of the chair of the board, the CEO, other directors et cetera and perhaps raise issues I had about the direction of the company and the decisions the board was making.

This is particularly important for smaller shareholders, because large shareholders in companies—the particularly large ones—tend to have a direct line of sight into the boardroom of that company. Probably, if their holding is significant enough, they have a seat on the board, whether they take that themself or have someone that they've supported into that position, and they have access to a lot of information about the company and the decisions that the company is making. For smaller shareholders, who don't have the capacity to elect themselves or someone that they can regularly discuss issues related to the company's decision-making with, access to that annual general meeting and questioning of board directors is their once-a-year chance to raise issues they've got as an investor with the company they invest in.

In a different era, it was always very important that companies held their annual general meetings in a well publicised way and at a venue that could accommodate a reasonably foreseeable attendance of shareholders, regardless of the size of a person's shareholding, so that everyone had equal access to the AGM. I know that in South Australia there have been some prominent annual general meetings. News Corporation used to hold their annual general meeting in Adelaide, given Adelaide was where Rupert Murdoch first started his career in newspaper publishing when he inherited Adelaide paper The News at the death of his father. That tradition of having the meeting in Adelaide was kept for many decades, but, sadly, it is no longer. I remember in my childhood it was quite a significant event when the global directors of News Corporation would come to Adelaide.

Equally, BHP at times have held their annual general meeting in Adelaide. As I understand it, they have a rotation. A few years ago it was Adelaide's turn to host the annual general meeting of BHP, given of course we have in South Australia the substantial Olympic Dam mine, one of the most significant assets that BHP have. They had decided at times to have their AGM in Adelaide. Santos is a substantial South Australian company, the most significant South Australian headquartered company on the ASX. Apart from those companies that I've listed, the vast majority of ASX 100 listed companies do not have their annual general meeting in my lovely city of Adelaide. If you're a shareholder of some of the major companies on the stock exchange, it is unlikely that you are going to be able to physically attend each and every AGM of the companies you have a shareholding in by hopping onto a plane and going to either Sydney or Melbourne, where the vast majority of these annual general meetings happen.

The coronavirus pandemic and the restrictions around the physical congregation of people provided an opportunity to trial the concept of annual general meetings going virtual. To my own observation, this has been a great success. An annual general meeting in physical times might have been attended by a few hundred people, for the more significant companies with large shareholdings, at a reasonable expense as well. Holding an annual general meeting—booking a venue, having catering, coffee and tea and things—is not insignificant. They would be accessed by maybe a few hundred people, whereas a virtual annual general meeting or a hybrid model of some type giving every shareholder the ability to attend virtually will provide the opportunity into the future for many thousands rather than hundreds of people to attend. They will be able to hear from the leadership of the companies that they invest in, and the virtual meetings will, very importantly, provide an opportunity for shareholders to ask questions of the senior leadership of the companies.

I honestly believe that it's in the best interests of the companies to embrace that component of virtual annual general meetings in particular and to use it as an opportunity to take more questions and inquiries from their shareholders than has been the tradition in days gone by when they've had a limited physical meeting. I actually think it does the company a service and it shows their investors a confidence when the board of management takes more queries and inquiries from investors about what the company is doing and why. They will be able to provide an answer to questions not just to the person who's asked but to all the people who are attending the virtual annual general meeting. This process can be a real democratisation of access to shareholders so that they can get a better understanding of what decisions are being made by the companies that they are investing in.

Virtual annual general meetings are a very good opportunity for more people to participate in a very important annual process of hearing from the leadership of the company explain some of their decisions, some of their financial results et cetera and take questions. It will be very much embraced by a much larger cohort of people than were able to attend when the meetings were held physically. Clearly, running physical meetings means making a decision to have them in a particular city, usually Sydney or Melbourne, and therefore disenfranchising people who simply would not see it as being worth their while to undertake the personal expense of travelling to that meeting. Equally, as I said, the opportunity to have a virtual meeting will also provide for a lot more scrutiny and oversight of the decisions of the senior leadership of companies, and that is a good thing.

This does bring us into the 21st century. I think it's something we will continue to look at beyond just the provisions in this bill to deal with the requirements and governance requirements of corporations. I could see the issues within this around the signing of documents et cetera within the Corporations Act as potentially being something that becomes completely ubiquitous across society into the future. I know it's already very commonplace to use electronic signatures et cetera to prescribe documents. I can foresee that that probably will become the norm across most of the signing that we have to do—maybe not as quickly for members of parliament, necessarily. Nonetheless I think this will just become a common trait in the business world and beyond, and I wouldn't be surprised if it's something that takes off with equal speed in other jurisdictions outside of Australia.

Equally, there is holding virtual meetings or giving the opportunity for people to attend the annual meetings of companies virtually. I think in some ways it will surprise people, after we have implemented this, that it took us so long to see this opportunity. Thankfully, we have all learnt so much more about videoconferencing and virtual attendance at meetings et cetera because of the necessity of the global pandemic. This is one of the legacies of productivity gain that we will have from this period of time, this coronavirus period, because we have been able to rapidly educate people that wouldn't have necessarily had the confidence to understand things like videoconferencing. Now, of course, 18 or 20 months into a pandemic, they have embraced it. So I think there is a very high awareness out there of the opportunities and how to engage virtually.

Both these measures, on the document side and the meeting side, are good, progressive reforms, and I commend them to the House.

See this speech in context