The temporary measures put in place during the COVID-19 pandemic to support companies in the use of technology to satisfy the Corporations Act 2001 (Cth) (Corporations Act) requirements in relation to meetings, have been extended in the Treasury Laws Amendment (2021 Measures No 1 Act 2021 (Cth) (Treasury Laws Amendment Act) which came into force on 14 August 2021.
This legislation, amongst other things, temporarily amends the Corporations Act to:
- Allow the use of either fully virtual meetings, including AGMs, or hybrid meetings (being a combination of a physical and virtual meeting) by directors, companies and schemes
- Allow the electronic distribution to shareholders of notices of meetings and other meeting related materials
- Provide that where technology is used to hold a meeting, shareholders must be given a reasonable opportunity to participate and to exercise their rights to speak, orally and in writing
- Provide for electronic and split execution of documents.
The above elements of the legislation expire on 31 March 2022.
The ability to hold virtual or hybrid meetings as extended by these temporary measures applies regardless of whether the Constitution of the company or scheme expressly contemplates this.
The ability to send meeting materials electronically allows for the sending of the entire notice of meeting electronically or for the sending electronically or by post of a “postcard” which contains sufficient information to allow the recipient to access the full notice of meeting electronically. The exception to that is if a shareholder has a valid election in place to receive documents in hard copy only.
The Government has released an exposure draft of the Treasury Laws Amendment (Measures for Consultation) Bill 2021: Use of technology for meetings and related amendments (the Bill) which seeks to make permanent a number of temporary legislative arrangements in relation to meeting requirements and other matters.
The Bill proposes to permanently amend the Corporations Act to allow the holding of virtual and hybrid meetings by directors, companies and schemes, the electronic distribution of meeting materials and the electronic and split execution of documents, as implemented temporarily under the Treasury Laws Amendment Act.
An important difference from the temporary measures implemented under the Treasury Laws Amendment Act is that under the Bill, a company of scheme will only be able to hold a fully virtual meeting if permitted or required under its Constitution. If your Constitution does not currently expressly permit virtual meetings, you should consider amending this by special resolution while the temporary measures under the Treasury Laws Amendment Act are still in effect.
For further guidance on compliance with the temporary measures under the Treasury Laws Amendment Act and on the permanent reforms proposed under the Bill, please see the Guidance Note released by the Governance Institute of Australia in collaboration with the Australian Institute of Company Directors, the Law Council of Australia, and the Australasian Investor Relations Association:
“Joint Guidance update