Letter to the editor - Australian Financial Review, 12 December 2014

Delivery by email: edletters@afr.com.au

ASIC is not ignoring companies who 'flout voting rules' on votes about executive pay (ASIC lets companies flout voting rules, AFR, 10 December 2014).

The 'two strikes rule' in the Corporations Act does not require resolutions to approve the remuneration report be decided on a poll.

Many company constitutions provide the chair of a meeting with discretion on whether to put resolutions to a poll or a show of hands. Of course, in making this decision, the chair should give effect to the real sense of the meeting.

ASIC has received few isolated reports of alleged misconduct on this issue. We have followed up with companies as necessary and also raised this as an issue with key industry groups. If we see systemic problems in this area, we will raise with government whether the laws should be changed on when a poll must be called.

The article also seems to imply the outcome of a vote can always be determined from the proxy votes received prior to the meeting alone. This ignores the impact on the final vote tally of those shareholders who attend the meeting who have not lodged a proxy vote.

ASIC places great importance on the rights of shareholders to participate in the corporate governance of a company and takes any reports of the infringement of these rights very seriously.

John Price

Commissioner, Australian Securities and Investments Commission

Melbourne, Vic

The Australian Financial Review published an AFR-edited version of  this letter on 12 December 2014