AGMs

Standard AGM questions for chair preparation


May 17, 2022

Here are some standard AGM questions likely to be asked at 2022 AGMs for chairs wishing to prepare in advance.

What did the proxy advisers do?

Did any of the 5 main proxy advisers - ACSI, Ownership Matters, Glass Lewis, ISS and ASA - recommend a vote against any of today's resolutions? Which of the proxy advisers are covering us and has their been a material proxy protest vote against any of today's resolutions? Will you disclose the proxy votes before the debate on today's resolutions so shareholders can ask questions about the reasons if there have been any protest votes?

AGM transcript request

Given the interesting discussions across a range of topics today, could the chair undertake to make an archived copy of the webcast plus a full transcript of proceedings available on the company's website? Will you commit to publishing a transcript from today, plus a back catalogue of AGM transcripts so investors can access a full history of debate at the most important governance meeting of the year. The likes of Nine, AGL, ASX, ANZ, CIMIC, Domino's, G8 Education and Lend Lease all produced their 1st AGM transcripts in 2021. Will you follow suit today?

Extra data on voting outcome

When disclosing the outcome of voting on all resolutions today, could you please advise the ASX how many shareholders voted for and against each item, similar to what happens with a scheme of arrangement? This will provide a better gauge of retail shareholder sentiment on all resolutions and was a disclosure initiative adopted by the likes of Metcash, Altium and Dexus after their 2021 AGMs.

Annual elections of directors

In 2019, Treasury Wine Estates voluntarily moved to annual elections for directors in line with best practice that occurs in both the US and the UK. Dual listed companies like News Corp and Rio Tinto all do this due to the laws in the US and UK and BHP has pledged to continue doing it even after its UK DLC ended last year. Can the chair comment on whether our company will follow this TWE lead and move to annual elections of directors at the 2023 AGM?

JobKeeper

Why did we claim it if we claimed and why did we hand it back if we handed it back? If competitors claimed it and we didn't, well done for this and what was the reaction from stakeholders when we decided not to get involved with widely rorted scheme?

Overboarding

If a director is overloaded, they can expect a question. The key yardstick is the ASA's 5 point maximum guideline with each board seat representing one point and a chair position representing 2 points.

Political donations

If the company has made any political donations in the previous two years, expect a question as to why as we prefer companies to have a policy of making no donations. This is currently adopted by the likes of Crown Resorts, Aristocrat Leisure, BHP and Rio Tinto.

Board diversity

Any obvious gaps will be questioned, including having too many directors living in the same city such as Scentre Group and Macquarie Group which are both dominated by Sydney-based directors.

Skin in the game

Directors should have invested at least one year's worth of cash fees into shares in the company and can expect a question if they haven't.

Badly structured capital raisings

If a director up for election has been involved in a badly structured capital raising which diluted retail shareholders, they can expect a question on this. Here is an example for Yasmine Allen at the recent QBE AGM:

In April 2020, Yasmine Allen was one of the Cochlear directors who treated retail shareholders poorly in a capital raising, by supporting a discounted $880 million institutional placement at $140 a share, followed by a $50 million SPP for retail shareholders which was patently too small. $300 million of the placement was allocated to a single London-based fund manager Veritas Asset Management, 6 times the amount that was proposed for Cochlear's 37,000 retail shareholders in the SPP. Cochlear ended up expanding the SPP to $220 million after receiving $417 million worth of applications from 16,651 retail shareholders. It refunded $197 million and used a scale back formula favouring wealthier retail shareholders, which included the directors. Given this disappointing history, if it comes to QBE doing a future capital raising, will Yasmine push for a PAITREO structure that treats all shareholders equally, rather than what she supported happening at Cochlear two years ago?