Bank activists obliged to rethink AGM theatre

Shareholder activists aiming to make a point via resolutions at company meetings will have to reconsider their options after one group had its plans smacked down by the Federal Court on Friday.

Ahead of last year's annual meeting of Commonwealth Bank, a group of environmental activists attempted to use resolutions of the AGM to promote their concerns.

The Australasian Centre for Corporate Responsibility proposed two resolutions that required the bank's board and management to report on greenhouse gas emissions the bank is responsible for financing as well as efforts to mitigate those risks.

The board of CBA knocked both back but allowed a third (with similar effect) to be on the notice paper, styled as an amendment to the constitution. CBA said it did not consider that the proposed amendment to the company's constitution was in the best interests of the shareholders.

Shareholders voting at the AGM late last year agreed, soundly voting it down.

The Australasian Centre for Corporate Responsibility has since consumed resources wrangling with CBA in court over the board's decision to reject the first two of its proposed motions.

Justice Jennifer Davies, in a ruling on Friday, held there is a "settled principle [which] holds that members cannot use their statutory power to move a resolution expressing an opinion as to how a power vested in the board by the constitution should be exercised by the board."

In her judgment, Davies said: "The proposed resolutions are not referable to any power other than to the power of management vested exclusively in the CBA board, it follows, in my view, that the CBA board is not required to put those resolutions to the AGM."