Two-thirds of risk and governance professionals are opposed to legislative change that would give shareholder activists a greater voice at AGMs, according to a new survey.
The Governance Institute has released a green paper titled Shareholder resolutions: Is there a case for change?, based on a survey of its members conducted in June and a roundtable discussion between industry stakeholders held in May.
The green paper has been developed in response to an Australian Council of Superannuation Investors (ACSI) paper titled Shareholder resolutions in Australia, Is there a better way? which was released in October 2017.
The ACSI paper outlined asset owners' concerns about the current framework for shareholder resolutions in Australia, advocating four options that would make it easier for shareholders to bring non-binding resolutions "on a broad range of topics" and/or trigger votes on sustainability/ESG reports.
In response, the Governance Institute green paper has found that its members are reluctant to allow "special interest groups to ‘hijack’ the AGM to pursue societal issues".
Sixty-three per cent of Governance Institute members said they would not support legislative change to give shareholders a greater voice on ESG issues.
One comment from the survey read: "I don’t want a minority of green socialists [sic] shareholders implementing their social agenda via a company."
The roundtable, convened for Governance Institute by LexisNexus, did not reach a consensus despite "robust discussion and debate", according to the green paper.
"There was some feeling that the current system needs streamlining, but no consensus on what form that streamlining might take, indicating that significantly more engagement and consultation is required to ensure the right policy settings are in place to adequately address this significant shift in shareholder engagement," concluded the paper.
The Governance Institute has called for industry submissions on its green paper, with a deadline of 10 August 2018.
"While shareholder resolutions are a relatively new phenomenon in Australia, there is a long history of using resolutions to pressure companies to address what are primarily ESG issues in the United States. They are also common in the United Kingdom," said the Governance Institute.
"The question is therefore, is there a case for change to amend the policy settings for shareholder resolutions?"
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