| Tom Bloomfield
In this update we examine the questions that are most frequently asked of LIC boards, management and auditors during AGM season.
The Corporations Act 2001 (Cth) preserves a shareholder’s right to ask questions of its board and auditors at the company’s AGM. The chair of an AGM must allow a reasonable opportunity for the members to ask questions or make comments about the management of the Company. However, the chair does retain the discretion to rule questions as not pertaining to the meeting or ‘out of order’.
Shareholders have a specific right to ask questions or make comments regarding the remuneration report, and to query the auditors on the conduct of the audit, the preparation of the accounts, or the accounting policies that have been applied.
Generally, the most common questions that face LICs relate to performance, dividends and investment manager remuneration.
The chair’s address and investment manager’s update have historically provided a platform to address most notable concerns that shareholders may have, and are both good opportunities to touch on many of the common questions below. Traditionally the chair’s address will review the past year’s performance, and provide a foundation for the investment manager to discuss the company’s strategy over the next 12 months.
These questions are among those most frequently asked of LIC boards during AGM seasons:
It is important to note that there are no simple right or wrong answers to these questions. The answers will depend on your own circumstances.
Considering the questions that your shareholders are most likely to ask helps the board and auditors be more prepared, keeps your shareholders feeling confident and engaged, and facilitates a smoothly-run meeting.
This update is prepared by the Company Secretarial Team at Boardroom Pty Limited. The update is designed to provide general information and is not designed to replace legal or tax advice or a detailed review of the subject matter nor is it intended to cover all circumstances.
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