Peter Costello’s parliamentary secretary Chris Pearce dropped out
this release yesterday detailing changes to the laws relating to what happens at
public company annual meetings.

The NRMA fiasco of endless EGMs (read its powerful submission) won’t happen again because the 100
shareholder rule will be abolished. However, the government has failed
to deliver on its promised quid-pro-quo change to make it easier for
shareholder resolutions at AGMs. Pearce explained the backflip as
follows:

The Government will not proceed with proposals to reduce the threshold
requirements for shareholders to propose members’ resolutions and members’
statements.

“Groups such as the Australian Shareholders Association (submission here) raised concerns that
such a change could make general meetings larger, longer and less focussed.
Accordingly, we will not proceed with this element of the package at this
time.”

The Government will continue to monitor shareholder participation, and review
this area of the law in three years, with a view to assessing the impact of the
reforms on shareholder participation.

Once again, the Howard Government has sided with the big end of town
and taken the low road for corporate accountability. If it’s good
enough for the home of capitalism, the US, to allow anyone who owns
$US2,000 worth of shares to get a shareholder resolution on the notice
paper, why do we retain this stupid roadblock that requires 100
shareholder signatures?

No individual has ever placed a resolution on the notice paper to my knowledge. Instead, only the
Australian Shareholders’ Association, green groups and unions have the
critical mass to gather the necessary signatures as the Business Council of Australia points out in its submission.

I’m partly to blame for this because even the galoots at the ASA
opposed any change to the 100 shareholder rule on the spurious grounds
that it would allow the unions and green groups to do it more often.

A Federal Labor MP asked me to make a submission spelling out the case
for lowering the requirement because they literally had no-one putting
the case. Silly me never found the time and now we’re stuck with the
government claiming to be following a consensus.

Peter Fray

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