If you’ve been thinking about updating your constitution, now could be an opportune time, as recent developments in the law, the ASX listing rules, corporate governance practices and general practice have prompted a number of listed companies to ‘refresh’ their constitutions this year, or to consider doing so next year.
The amendments generally aim to better facilitate the use of technology in the conduct of meetings and dispatch of documents, ensure meetings can be conducted safely and efficiently, and update certain outdated provisions and terminology.
In particular, some companies are updating their constitutions to:
- better facilitate hybrid meetings, including by expressly setting out how technical difficulties can be managed, and giving shareholders additional flexibility to participate in hybrid meetings in the manner most convenient for them;
- assist with the orderly conduct of general meetings, including by expressly setting out how the chair can manage disruptive shareholders, or who do not comply with security arrangements, like at the Shell AGM in the UK which we’ve written about elsewhere;
- assist with the administration of general meetings, including by expressly setting out how the company may deal with incomplete or unclear proxy forms, use technology for shareholder notices and manage ‘lost’ shareholders;
- prepare for the ASX to replace CHESS (whenever that may be); and
- reflect recent changes to the Corporations Act, including regarding voting by poll, and to the ASX listing rules, including regarding constitutional requirements for restricted securities.
‘Virtual only’ meeting amendments remain rare, with only a handful of ASX200 companies proposing such amendments so far this year. Of those, one company’s proposed amendments weren’t passed, and another company released a subsequent announcement to clarify that ‘virtual only’ meetings would only be held in exceptional circumstances. This follows the ‘megaphone tactics’ employed by proxy advisers last year claiming shareholder concerns with ‘virtual only’ meeting amendments, which we’ve written about elsewhere.
