The initiative was led by US pensions provider, TIAA, with engagement support from ACSI and called for companies to adopt poll voting by default. The initiative contacted 38 of Australia’s largest companies who used ‘show of hands’ during the 2014 voting season. Since then, almost two-thirds changed their practices at their 2015 shareholder meetings, compared to 2014, with most moving to poll voting for all resolutions. The ASCI said this result demonstrated the power of global investor collaboration on corporate governance issues, and the willingness of progressive companies to respond quickly.
Across the Australian market, there is a clear, long-running trend towards poll voting. In 2010 only around a quarter of ASX200 companies used it for all resolutions – today three quarters do. Among ASX100 companies, under 10% still use show of hands.
The ACSI chief executive, Louise Davidson said, “We’ve been advocating for a voluntary commitment to poll voting by Australia listed companies for some time. We’re very pleased at the progress achieved through this investor collaboration, and the responsiveness of companies that have changed their practices. In the longer term, polling should be a mandatory requirement enshrined in the Corporations Act.
“We’re seeing an increased interest by international investors in the corporate governance of Australian companies, and we are delighted to have worked with TIAA and the other participating investors in achieving this result,” Ms Davidson said.
Although show of hands voting is based on vote per person in attendance, Australian company law, in line with the UK, requires votes to be taken on a poll if the chair believes that, if a poll was held (based on the proxies to hand and any knowledge of significant shareholders in attendance) the result of the poll would be different from the result of the show of hands (including the calculation of the 25 per cent approval threshold (s 250U) on the resolution to adopt the remuneration report), they should immediately call for a poll.
This is a requirement of the Corporations Act 2001 (s 250J) to ensure avoiding a breach of the chair’s common law duty to give effect to the real sense of the meeting. See also Governance Institute of Australia