LIC Governance Spotlight: AGM Planning and Frequently Asked Questions by Shareholders

3 Oct 2018

In this update we examine AGM planning considerations and the questions that are most frequently asked of LIC boards, management and auditors during AGM season.

Planning Considerations

A Listed Investment Company (LIC) should consider the following when planning their Annual General Meeting (AGM):

  • Agreeing a date for the AGM at board level and communicating this to the company’s share registry provider with a request for their attendance at the meeting, if required;
  • Utilising an AGM Date Calculator (please email us if you’d like a template) to understand key deadlines prior to the meeting, including those related to the Notice of Meeting, ASX approvals, lodgements, print and mail, proxy close dates and interaction with key stakeholders;
  • Booking a meeting venue and other logistical considerations including handheld voting and IT requirements to allow virtual access to the meeting;
  • Content of the Notice of Meeting and factoring-in potential regulatory approvals of the content into the above-mentioned timetable (email us if you require assistance here and with drafting the Notice);
  • Considering which directors will be subject to elections and rotations;
  • Giving shareholders the ability to vote online, through consultation with the company’s share registry provider;
  • Shareholder engagement (further detail below);
  • Considering the Key Management Personnel (KMPs) and Closely Related Parties (CRP) for the purposes of voting restrictions;
  • Drafting a meeting script and addresses (further detail below), potential shareholder questions (further detail below), content of presentations and ASX releases related to the meeting;
  • Attendance consideration on the day of meeting including if guests and the media are permitted; and
  • Voting methods and the preference for a show of hands or poll, and the expectations of shareholders in this respect.

Transparency on the beneficial holders of shares

LICs will conventionally have one or more institutional investors with securities held behind a nominee holding. Consequently, if a LIC simply relies upon the list of top registered shareholders to know who the major shareholders are, the company may be missing a vital part of the picture.

To gain certainty and clarity on the beneficial holder of nominee held shares, LICs should consider an in-depth analysis of the share register through an investor advisory firm and/or beneficial holder traces through the share registry provider. Such an analysis can assist with:

  • Analysing the level of influence that proxy advisory firms have on the company’s register;
  • Undertaking institutional shareholder engagement before your AGM; and
  • Tracking instructions received by nominees before votes are lodged, letting companies know the likely outcome of a vote ahead of the proxy deadline.

Questions from Shareholders

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 LICs face relate to performance, dividends 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.

A copy of the Chair’s address and Investment Manager’s update should be announced to the ASX in the morning of the AGM, prior to the commencement of the meeting.

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 adequate 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.


AGM planning and 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.

Click here to download a printable PDF file.

Contact BoardRoom for more information:

Tom Bloomfield

General Manager, Growth & Partnerships
+61 2 9290 9617