Views sought on draft legislation for electronic meetings

By Tom Ravlic

September 1, 2021

Department of Treasury, Canberra
Treasury’s analysis warns increases in oil prices are resulting in higher petrol costs. (AAP Image/Lukas Coch)

The federal government is asking stakeholders to comment on draft legislation that will hard wire the use of electronic meetings and the signing of electronic documents if passed.

Draft laws, which are open for public comment until September 10, will bring company law into the 21st century as they propose making greater use of technology in the governance of companies.

Federal Treasury estimates that companies and registered schemes would save an average of $450 million a year in compliance costs over a decade.

The proposal to give companies and registered schemes the right to hold what the explanatory memorandum calls ‘hybrid meetings’ would make the coronavirus exemption companies were given during 2020 to hold their meetings electronically permanent.

Companies and registered schemes would be able to hold meetings that are either meetings requiring physical attendance, a combination of in-person and virtual attendance or virtual attendance only.

“The new law is not prescriptive about how a meeting should be conducted. It does not mandate a particular format for a meeting or a particular way in which a show of hands or a vote on a poll is to be conducted,” the explanatory memorandum states.

“It recognises that the meeting rules apply to a broad range of companies, from small not-for-profit companies to large listed companies, and allows each company to select the format for the meeting that is most appropriate for that company.”

Making virtual attendance or completely virtual meetings for companies means that boards of directors and their company secretaries will need to think about the virtual equivalent of the procedures they would previously have used in person.

People attending electronically will need to be counted as a part of a quorum to ensure that the meeting is able to go ahead with the minimum number of shareholders required by the constitution.  

Any technology used will also need to provide shareholders in attendance the ability to vote remotely on motions during the meeting. Virtual voting then enables a shareholder to vote in their own right rather than give their proxy to another person in attendance at the meeting to vote on their behalf.

The draft laws also provide that companies and registered schemes can have documents relevant to the running of a company or registered scheme signed using methods that are flexible and technologically neutral.

Proposed changes cover both private and public companies and provide for circumstances in which there are sole or one director companies.


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