Agm - Law-Direct Duty

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The current legislative regime of shareholder requisition of member meetings

The corporation Act 2001 prescribes provisions and procedure with respect shareholder requisition of member meeting. Firstly, the members with at least 5% votes or at least 100 members who have right to vote at a general meeting can request directors to calling of general meeting (249D). Moreover, members who have at least 5% votes which have right to cast at a general meeting can call for general meeting (249F). Secondly, the members who are mentioned give notice of resolution to company at AGM (249N). The responsible entity must inform all of the members and give them scheme notice of resolution without more than 1000 words long or members bearing expense of sending notice out (249O). Also, responsible entity is required to give a statement to members. Thirdly, a company can be requested by members to give all members a statement. The request includes a resolution which is may be moved at a general meeting or other matters which would be considered at a general meeting.

NRMA V PARKER (1986)

The purpose of member meetings is that members are in the meeting, convene requisition and judges whether propose resolution is effectively passed at meeting and whether object of the meeting are affected by the meeting. The directors of a company hold AGM after the date of receipt of a requisition. The requisition may be disregarded by directors or resolutions would be held if it failed to be passed by the meeting. Also, the object achieves maximum effective voting at the general meeting. However, if a requisition for a meeting pursuant to the company insufficiently states that the object of the meeting cannot be affected by a resolution of the member at AGM, it is supposed to be invalid. In addition, in previous year, even though regulation had not been made, it would be valid. However, at present, any prior act is invalid if there is no regulation made in the general meeting.

The debate on the shareholder requisition of member meetings

Shareholder Participation in the Modern Listed Public Company（2000） shareholders are permitted to requisition an extraordinary general meeting in order to meet the need of balancing the right of decision-making of shareholders and implication for being managed by corporate. Shareholders acquire the right to requisition a general meeting and independent of an annual general meeting. There are two prerequisites applied: the first is that 100 shareholders have right to vote without average capital requirement at the general meeting. The second is that only shareholders with 5% votes have the power to requisition a general meeting because they cast a general meeting. The company is responsible for the cost of calling requisitioned meeting. At common law, if the purpose is detrimental to the company and shareholders under certain circumstances, directors refuse to comply with requisition. However, the grounds for refusal under the proper purpose exception are limited and can be circumvented by appropriately drafting the requisition. Also, company may be reluctant to refuse to convene a meeting on these grounds.[3]Some respondents favored a self-test of 100 shareholders or comply with an additional requirement and shares have the minimum value hold by requisitioning shareholder. Others considered that the minimum value is that 500 shareholders or 5% account for the total number of shareholders. Some respondents support to abolish a shareholder numerical test in order to make the meeting wider than current law through refused by directors to convene. Most respondents support that a general meeting would only be called by an issued share capital test. They considered that just relies on a just small group of shareholders to let the company too much time and bear the expense of general meeting is too simple. The shareholders who have interest of the company requisition of member meeting. Only in this circumstance, the cost of an extraordinary general meeting can be ensured by share capital test.

Debate on Shareholder Requisition of Member Meetings Parliamentary Joint Committee on Corporations

Shareholder engagement and participation in Australia (2008) indicates that shareholders conduct their voting right effectively to perform their role of accountability. In addition, shareholders can obtain an opportunity to directly engage with company provided by attending AGMs. The rule should be changed for some reasons. Firstly, there are some deficiencies in the matters of participation and engagement of shareholders is apathy. Also, cultural resistance of company acknowledging the opinions of investors has some drawbacks. Specifically, there are overly relaxed systems which are detrimental to the shareholders widespread in the company, which means the current management mechanism of the company is not perfect. In addition, shareholders can obtain an opportunity to directly engage with company provided by attending AGMs. Evidence showed that current voting process unable to inform the voting decisions of shareholders at AGM of the company. The attendance at AGMs is too low, which indicates that before discussion resolution, most votes have been lodged by proxy. Evidence showed that the current voting process unable to inform the voting decisions of shareholders at AGM of the company. Relevance of the information should be improved at the AGM and formal voting and dialogue function also should be separated because it is better to make the original purpose of the company meeting to be reflected more clearly including asking questions, making comment and voting. In addition, ASIC should make practice guidelines for AGM of company and company need to simplify their reporting by making it clearer and more concise to shareholders.

Conclusion

This report includes annual general meeting and shareholder requisition summaries from some documents. It deals with a key aspect of the purpose and importance of annual general meeting and issue of shareholder participation in listed companies. This report summarizes the current legislative regime of mandatory AGM for listed public companies Furthermore it highlights the debate on the future AGM and shareholder requisition of member meeting of discussion paper and shareholder engagement and participation report. It also summarizes some recommendation about the development of shareholder requisition and AGM.

Reflection

AGM must be held in all public companies. AGM not only plays a main role between shareholders and companies and also be a tool in accountability controlled by company