Bendigo and Adelaide Bank directors have ditched a potentially controversial proposal that would have allowed the company to hold online-only annual meetings in a post-COVID environment.
The bank announced yesterday it had withdrawn the proposal that was previously part of a wide-ranging resolution to overhaul the company’s constitution at the annual shareholders’ meeting next month.
Leading governance and shareholder groups such as the Australian Shareholders Association and International Shareholder Services have campaigned for more than a year against moves by some ASX-listed companies to adopt the online AGM as a permanent format.
Online meetings became an issue of controversy last year during the first wave of the pandemic when CBA shareholders accused their bank of stymieing debate and scrutiny of the board.
The 2020 CBA AGM ran for only two hours – the shortest in more than a decade - after numerous shareholders accused the bank’s chair Catherine Livingstone of not answering all questions they submitted to meeting facilitators via a special call centre.
While Bendigo’s board said in an ASX filing that it only intended to use the online-only format in “unusual circumstances”, it decided to drop the proposal rather than imperil other important changes to constitution.
“One of the proposed amendments is to amend Rule 38 of the Bank's constitution which would allow the Bank to hold meetings of shareholders using virtual meeting technology only, which was only proposed to cater for highly unusual circumstances,” Bendigo directors said in the filing.
“Despite this narrow use intention, there have been some reservations expressed about companies holding virtual meetings.
“As the other proposed amendments to the Bank's constitution are important or necessary, the Board has determined that the proposed amendment to Rule 38 (and the definition of “shareholders present” in Rule 1) will be withdrawn.”
ASA chief executive Rachel Waterhouse welcomed the bank’s decision, saying that ASX-listed companies should embrace the notion of hybrid meetings that allowed shareholders to participate online or attend in person.
“We’ve been lobbying the government and speaking broadly to companies about our preference for hybrid AGMs when it is safe to do so,” she said.
“Going forward we would like to see the hybrid meeting become a standard practice.
“Not all shareholders are tech-savvy, so it’s important that all shareholders be given the same level of access to ask questions.”
The proposed overhaul of Bendigo’s constitution includes an important new clause that would prevent a hostile party from launching a proportional takeover bid for the company without securing the support of a majority vote at a special shareholders’ meeting.