Shareholder dissent at 2026 AGMs held so far has been selective. Most board-supported resolutions have passed, but some remuneration votes, director elections and incentive grants have attracted comparatively greater opposition. Shareholders are also using question time to test companies’ more detailed climate disclosures, and board accountability. The results of resolutions tells only part of that story.
Three developments are particularly relevant for companies preparing for their AGMs in the coming months.
Remuneration votes are (still) testing more than pay
Remuneration votes continue to provide a way for shareholders and proxy holders to express concerns about a board’s decisions, whether relating to remuneration or otherwise. Some pay packets were opposed on the basis they were overly generous, while other protest votes appeared to relate at least as much to governance concerns regarding things like executive share sales and the absence of a minimum shareholding requirement.
Boards preparing for a vote need to be able to explain both how an incentive operated and why the resulting outcome is appropriate in the circumstances. A resolution passing, or a spill proposal failing, does not remove the need to be able to respond to a substantial protest vote or questions at the AGM in relation to remuneration.
Meanwhile the UK government is consulting on how remuneration reporting could be streamlined, including whether information in the report could be simplified or removed, and whether the advisory vote on the directors’ remuneration report should be removed. The AASB has previously found that, based on a jurisdictional comparison, ‘Australia sits at the top end of disclosure requirements in terms of the level of detail that must be disclosed’. We’ve been arguing for many years that the two-strikes rule has led to a significant waste of time and money, with very little benefit to shareholders.
The Productivity Commission is currently inquiring into opportunities to improve the efficiency and value of non-financial business reporting requirements. We’re watching with interest as to whether remuneration reporting and the two strikes rule are identified as ‘pain points’ by the Commission, and areas where the reporting burden could be reduced. We think Australia should follow the UK’s lead in simplifying the current remuneration reporting regime for listed companies. Having to comply with overlapping and onerous remuneration reporting regimes, and expending significant internal and external costs and resources to comply with these regimes, is detrimental to the public market and incentivises private companies to remain private, a key focus at the moment with the shrinking ASX.
Director accountability is becoming more specific
The director-election results reviewed so far show how shareholders can distinguish between candidates at the same meeting. At one AGM, support across director elections ranged from 78% to 99%. Those figures do not disclose why each shareholder voted as they did, but they provide a reason to examine whether particular board roles or decisions have attracted concern.
Question time and other shareholder actions can elicit an indication of why accountability is being tested. At 2026 AGMs some shareholders have been asking detailed questions about audit tender arrangements and particular director involvement, while others have submitted member statements on biodiversity issues and linked them to chair re-elections.
Companies should consider what their notices say about each director’s experience, responsibilities and contribution, and be prepared to address the substance of any member statement. The distinction between a general objection to company strategy and an allegation about an individual director’s oversight or independence will be important in the board’s response.
Climate reporting is changing AGM preparation
2026 AGMs have been the first at which companies must lay their statutory sustainability report and the auditor’s report on it before shareholders. They’re also the first at which shareholders have had a statutory right to ask questions of the auditor on the auditor’s report on the sustainability report and the company’s sustainability reporting policies.
These new developments allow shareholders to frame more detailed questions, and may also embolden them to ask more questions. Already at 2026 AGMs we have seen shareholders questioning how company actions sit with stated climate commitments, and challenging assessments of climate-related financial impacts. Interestingly, the more detailed disclosures and statutory right to ask questions hasn’t stopped shareholder resolutions on climate issues. These have picked up where commitments have changed, or emissions exposure has increased, requesting further detail. There has also continued to be a focus on nature issues in shareholder resolutions, including deforestation and plastic packaging.
For companies preparing for their first such AGM, the practical task is to ensure the chair and CEO are properly briefed and appropriately informed to be able to respond to questions on the sustainability report, which may raise scientific and difficult issues.
Looking ahead
Early observations provide an indication of where shareholders may continue to direct their attention: explanations of pay outcomes, particular director accountability, and climate and nature approaches. Companies with AGMs ahead will be best placed to respond if they treat those matters as part of the meeting narrative, as well as items on the voting card.
