LIC Governance Spotlight: AGM Frequently Asked Questions

7 Nov 2017

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 performancedividends and investment manager remuneration.

Chair’s Address and Investment Manager’s Update

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.

Frequently Asked Questions

These questions are among those most frequently asked of LIC boards during AGM seasons:

Performance and Strategy

  • Please comment on the reasons for the company’s performance over the last 12 months. What worked and what would you do differently?
  • What evidence do you rely on to support your view of the company’s performance over the next 12 months and beyond?
  • What is the board’s view on consolidation opportunities with similar LICs?
  • Does the LIC intend on raising capital over the next 12 months and if so, by what means?


  • Please explain the company’s dividend policy.
  • When will the Dividend Reinvestment Plan be introduced/ re-opened?
  • Are dividends likely to increase?

Board and Investment Manager Remuneration

  • How are the investment manager’s performance and remuneration reviewed?
  • How are the board and investment manager’s remuneration set?
  • Are non-executive directors required to hold shares in the LIC and if not, why not?

Director Elections

  • [Where directors have multiple board commitments:] How has the board satisfied itself that a director put forward for re-election has sufficient time to commit to the LIC?
  • What is the board’s plan to improve diversity?

Auditor Questions

  • What is the process for valuing financial assets held by the company?
  • Where assets are unlisted stock or emerging companies, how is fair value determined?

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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Contact BoardRoom for more information:

Tom Bloomfield

General Manager, Growth & Partnerships
+61 2 9290 9617