6 questions asked at 2022 AFIC AGM

October 4, 2022

The following 6 online questions were asked at the 2022 AFIC AGM held in Melbourne on October 4.

1. Why are we still not publicly disclosing how we vote our shares at AGMs, or at least providing a summary of how we voted. This is becoming fairly standard transparency for industry funds and global fund managers so why won't Australia's biggest LIC adopt the same practice?

Answer: asked third and read out in full. Chair John Patterson talked up their frank engagement with many chairs. "We think those private discussions are more effective." Generating headlines might not help with company engagement.

2. Nothing has happened strategically within the AFIC stable since Amcil was floated on February 9, 2000. Have you been asleep for 22 years? Meanwhile, Argo has created an infrastructure fund, Soul Patts has snapped up Milton and Geoff Wilson's stable have taken over multiple smaller LICs. Why do we continue to be completely absent from all this corporate activity when we are still Australia's biggest LIC and should be getting bigger by snapping up smaller rivals and delivering scale benefits for investors.

Answer: asked second and edited down. Chairman John Patterson said mergers were too complex and distracting.

3. Craig Drummond has recently become both President of Geelong Football Club and chairman of Transurban. Both are very big gigs. Could both Craig and the chair comment on how our busiest director will have the time to fulfill his AFIC duties and exactly how many hours a week on average do both feel a regular AFIC NED would and should put in? Could Rebecca also comment on her view about the AFIC workload?

Answer: Craig gave a good summary of Geelong taking one day a week and with AFIC and Transurban being his only other gigs, his workload is well in hand.
4. Thank you for offering a hybrid AGM today, which is best practice. Continuing the theme of best practice, will you include a full archive of the webcast and a full transcript of proceedings on your website after the meeting to maximise access for your more than 100,000 retail shareholders. There has been lots of interesting debate today, including on this rare amendment to the AFIC constitution and companies such as Nine, AGL, ASX, ANZ, Domino's, G8 Education and Lend Lease all produced their 1st AGM transcripts in 2021. Will you follow suit today?

Answer: never asked.

5. There was a 13.6% vote against last year's remuneration report on the directed proxies but the total vote on the resolution was only 85 million shares or just 6.9% of the 1.235 billion shares on issue. Why aren't the owners of 93% of our shares on issue actively participating in our democratic processes by directing their votes in a considered manner, as opposed to giving undirected proxies to the chair or the ASA. AFIC has more than 100,000 shareholders, making it Australia's most widely owned LIC. In order to improve transparency and boost voting participation at future AGMs, could you please disclose the voting outcomes in terms of both shares and shareholders, like what happens with a scheme of arrangement. I suspect more shareholders directed proxies against today's remuneration report than in favour but there is no disclosure. Is that true and will you follow the lead of companies like Webjet, Dexus, Altium and Metcash by disclosing how many shareholders voted for and against each item of business?

Answer: asked fourth but no commitments about improved voting disclosure or turn out.

6. Why do we own 10% of rival LIC, Diversified United Investments, which is ultimately controlled by the Sir Ian Potter Foundation. As the second largest shareholder in this $1 billion LIC, what are we doing to persuade them to appoint a female director because at the moment it is an all male affair led by veteran chairman, Charles Goode. Further to the earlier question about LIC consolidation, why don't we merge with DUI so the Potter Foundation and Charles Goode can focus on running its larger sibling, Australian United Investments, known as AUI? If they known back this proposal, what do you think about the idea that sell out and unwind this clubby arrangement.

Answer: was asked first but heavily edited by Geoff Driver. Mark Freeman said DUI stake was bought opportunistically many years ago and selling it would just trigger a big tax bill.