Dave Sharma (Wentworth, Liberal Party) Share this | Hansard source

I rise to speak on the Corporations Amendment (Meetings and Documents) Bill 2021. They often say that necessity breeds invention, and I think the pandemic has certainly taught us this. In any number of spheres of life we've found that the technology clock, or the digital transformation of our lives, has accelerated. Schooling, which had never previously been done remotely, or had never even been considered to be done remotely, suddenly became a full-time remote affair. People who may have worked from home for perhaps half a day a week or even less were suddenly working from home full-time. Things like electronic commerce, broadband usage, shipping of goods and sites like eBay and Amazon went through the roof. This pandemic has taught us, on the upside at least, that our society was more prepared for these innovations—and that, as individuals, we were more psychologically prepared for these innovations—than perhaps we had earlier given ourselves credit for.

The operation of the corporate world here is no different in this regard. When the pandemic struck suddenly, a large number of basic functions a company needs to do on a daily basis to remain compliant with various statutes and laws became very difficult. You could no longer meet in person. It was difficult to conduct AGMs. Even moving documentation around became difficult. On 5 May 2020, which was still in the very early stages of the pandemic, the Treasurer used the temporary powers available to the Treasurer under the Corporations Act to allow companies to use technology to satisfy their obligations relating to things such as meetings and document execution. That initial allowance provided by the Treasurer, using temporary powers, expired on 21 March, but it was renewed again on a temporary basis through the Treasury Laws Amendment (2021 Measures No. 1) Bill 2021. That current arrangement allowing for this is still a temporary or transitional arrangement; it will expire on 31 March. This bill will make that permanent.

There has been significant consultation on this. Many shareholders, many company secretaries, many boards and many directors have had some experience in doing these things over the past 12 to 18 months, and of course shareholders and the people who own these companies have also been involved. Generally speaking, with some small caveats and some small pools of resistance, the experience has been a positive one. Before coming into this place I was the chair of a publicly listed ASX company that had its operational base largely in Israel and many of its shareholders in Israel and America, so I was quite used to doing not only board meetings remotely and electronically—and often in unusual times—but also AGMs, where the number of shareholders physically present was actually quite small; the bulk of the shareholders were located in overseas jurisdictions. So we know this can be done, and the pandemic has given more traditional companies, where the ownership and control and corporate governance all tend to be domiciled in one jurisdiction, the experience of doing these things digitally and remotely—and the experience has been overwhelmingly positive.

This bill will make permanent the temporary relief that's already being granted both in respect of the electronic execution of company documents, allowing companies to sign and provide meeting related documents electronically—they could include the agenda for the annual shareholder AGM—and holding meetings electronically, using technology including hybrid meetings. Virtual only meetings—that is, where all the participants are not physically present—are only permissible if more than 75 per cent of shareholders have agreed to amend the company's constitution to allow such meetings. I would expect that, by and large, most of these new meetings will be conducted on a hybrid basis—that is, with some shareholders and directors physically present and others virtually present.

I think that will be important because, as many of us have noticed through this pandemic, holding meetings virtually has allowed us to open up whole new horizons of participation. Elderly people who find it difficult to travel or leave their home and people who suffer a disability or lack mobility broadly suddenly have been able to participate in meetings. I have noticed that, in a few church services that I have attended electronically, rather counterintuitively, the number of attendees has actually gone up. People who would find it difficult to go to church or perhaps wouldn't want to dress up in their Sunday finest or didn't want to drive somewhere or get a parking spot were now able to tune into the church service. So the congregation in a number of churches in my own electorate has grown. I expect this will be the same with AGMs, because people who might own shares in the Commonwealth Bank or Westpac, for instance, may not want to travel to the CBD in Sydney for the AGM; they might not be able to. They might not be in Sydney at all; they might be in another capital city. They will now be able to participate in these AGMs, ask questions, raise concerns and raise issues.

Similarly, I think it will also allow a greater enfranchisement of a large number of shareholders. At the moment, if you're not a large shareholder or not a particularly active or engaged shareholder, you would tend not to physically attend an AGM. You might watch it online, perhaps, but not participate in it, or you might just read the notice of the decisions, or you might vote in advance on any resolutions that are coming up, but you wouldn't actually attend. What this will allow shareholders to do is to play a more active role and participate more actively in the governance and decision-making of the companies in which they have a share.

I think the other changes are relatively modest, particularly the electronic certification of documents or the electronic execution of company documents and allowing the provision of meeting related documents electronically. Shareholders are obviously still able to request that these sorts of documents are provided to them physically, I suspect. Most people, like me, tend to opt out of that and ask for electronic transmission of documents, and many of us are also quite familiar with those platforms which have proliferated during this pandemic which allow for electronic signatures to be attached to documents in a way that is legally binding. What this legislation does is make sure, importantly, that those changes are given legal legitimacy, but it also makes these changes permanent.

Finally, I would say that, while these changes are relatively modest in the scheme of things, they are important, because they're about modernising our business practices and our ways of doing things; they are about creating more efficiencies by allowing those things to happen; and they're about empowering individuals, by and large, because they allow for participation and involvement in things like the governance of companies as a shareholder in a way that really wasn't possible before. For those reasons, I believe these are important reforms and I commend this bill to the House.

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