Australia's 2017 AGM season was significantly "less tumultuous" than the 2016 season, with fewer ‘strikes’ (a 25% vote against) on remuneration reports the Australian Securities & Investment Commission (ASIC) has reported.

Most Australian companies hold their AGMs in October and November and the ASIC reviews the voting results from those meetings each year. The ASIC found that among ASX 200 companies there was a significant decline in the number of first strikes on the remuneration report, from 11 in 2016 to five in 2017.

Only one of the 11 companies that received a first strike in 2016 received a second strike. The ASIC said commentary from companies suggested that the key factors for the decline in the number of second strikes were companies actively engaging with shareholders and making changes to remuneration structures such as reducing complexity and withholding bonus payments.

There was, however, a sharp increase in companies receiving a close call ‘against’ vote of between 20–24%, from five in 2016 to nine in 2017. Meanwhile, for nearly two-thirds of companies, voting results on remuneration reports in 2017 were consistent with 2016.

The ASIC said a number of forms of shareholder engagement were evident in Australia's 2017 AGM season – from private discussions between shareholders and companies to media-run campaigns and shareholder-requisitioned meetings. At the same time the research that shareholders were also holding directors to account for material ‘against’ votes on their election. Gender diversity on the boards of ASX-listed companies was one area of focus with the Australian Council of Superannuation Investors (ACSI), recommending that its members vote against the election of certain directors in companies without female representation on their boards.

Shareholders also exercised their rights to requisition resolutions relating to environmental, social and governance (ESG) issues in relation to eight ASX 200 companies. These resolutions focused on climate change and
human rights issues. However, there was little support for these resolutions from non-requisitioning shareholders.

ASIC commissioner John Price said: "Shareholder engagement is a cornerstone of good corporate governance and annual general meetings are an important opportunity for shareholders to hold their board and, through the board, company management to account for a company’s performance. Therefore ASIC actively monitors the AGM season each year and our observations become an important and on-going resource informing our regulatory work in corporate governance."

The ASIC's report highlighted the need for boards to make the most of AGMs as an opportunity to be transparent, accountable and willing to engage with shareholders in order to enhance the long-term performance and corporate value of a company.