The Governance Institute of Australia, of which Mertons is a keen supporter, concisely outlined current views thoughts on best practice when it comes to voting at an AGM in their March 2015 document “Governance Issues arising from the 2014 AGM season”.
Anecdotal evidence suggests that corporate governance practioners favour voting on a poll and the guide highlights the key points to help you decide on which option is right for your meeting:
When to use a poll:
High Shareholder Attendance: Companies expecting more than 30 shareholders to attend and vote should be ready to vote on a poll to avoid a potentially long and painful exercise of voting on a show of hands.
Contentious Issues: The Chair should not use a vote on a show of hands to try and obtain a different result than might be indicated in the proxy voting and reflected in a vote by poll. The Institute notes that “Chairs should also consider that it may be a breach of their duties if they do not give effect to the wishes of shareholders.”
When to use a Show of Hands
For a non-contentious issue and where the proxy voting shows clear support for a resolution: A show of hands is immediate and avoids a delay in announcing results generally associated with counting of paper polling votes.
Low levels of shareholder attendance: Smaller listed companies with typically lower attendance levels may find that voting on a show of hands is easily managed and avoids expensive polling technology or additional personnel.
It is worth bearing in mind that members with at least 5% of the votes that may be cast on the resolution or the Chair can call a poll. Even if the intention is to proceed on a show of hands at the meeting the Chair should be prepared to go to a poll if required and ensure the necessary resources are available to collect the results.
For a listed entity, polling results are required to be released to the ASX with the results of the general meeting as soon as practible.
Our team has provided company secretarial and corporate governance services to ASX listed companies for over 20 years and helped manage their obligations using a responsive and effective approach. If you’d like to discuss how we can help you with Company Secretarial requirements please contact us on (03) 8689 9997.