The legislation also makes permanent other changes to the Corporations Act brought in as temporary relief in 2021 under the Treasury Laws Amendment Bill (2021 Measures No.1) (TLAB1), which enable companies to use technology to execute company documents and send meeting-related materials.
AICD Managing Director and CEO, Angus Armour, said, “We congratulate the Federal Government on this important modernisation of our corporations law.
“This is welcome news given many organisations are still operating under pandemic conditions that present challenges for enabling face-to-face gatherings. The ongoing impact of the COVID-19 pandemic has demonstrated how critical it is that our legislation provides flexibilty for companies to adopt the best meeting format for their circumstances, whether that be physical, hybrid or wholly virtual. The AICD has been a strong advocate for these reforms.
“The use of technology has provided an opportunity to reinvigorate the format of company meetings by removing geographic barriers to attendence and increasing engagement by shareholders and members who may have otherwise not travelled to attend in person.”
Unlike the temporary COVID-19 relief measures, which overrode any restrictions in a company’s constitution from holding a virtual meeting, under these permanent reforms virtual meetings may only be held if they are permitted by the company’s constitution and consented to by shareholders/members.
Organisations will therefore need to seek approval from 75 per cent of their shareholders to amend their constitutions to hold a virtual-only meeting.
“Importantly, this legislation strikes the right balance by enabling companies to continue to meet their governance obligations using technology, while ensuring appropriate safeguards are in place to protect shareholder and members’ rights and meaningful participation at meetings,” Mr Armour said.
The new laws will apply to documents sent and meetings held on or after 1 April 2022 but will immediately apply to the execution of company documents.
