ASIC advises that a listed company may accept proxy votes for general meetings that are lodged by electronic means without amending its constitution to expressly permit that.

ASIC has today written to the Chartered Secretaries Australia, a professional body for company secretaries, with a request that this advice be communicated to its members.

ASIC has taken this action following the Productivity Commission’s recommendation in its report on executive remuneration that ASIC issue a public confirmation to companies that electronic voting is legally permissible without the need for constitutional amendments.

In his response to the Productivity Commission’s report, on 16 April 2010 the Hon Chris Bowen MP, Minister for Financial Services, Superannuation and Corporate Law supported ASIC providing this confirmation.

The Corporations Act 2001 (the Corproations Act) specifically allows for both the electronic authentication and the electronic receipt of documents appointing a proxy to vote for a shareholder at a company meeting. This is the case even if a company's constitution does not provide for the electronic authentication or electronic receipt of proxy documents.

Further, the relevant provisions in the Act will override any inconsistent provisions which may be in a company's constitution. In forming this view, ASIC notes the judicial approach taken in Bisan Ltd v Cellante and Ors (2002) 43 ACSR 322 which held (at paragraphs 23-24) ‘the requirements of ss 249Y, 250A, 250B and 250BA of the [Corporations] Act would override any inconsistent provisions in the corporate constitution.’

Section 250BA only applies to listed companies. In the unlikely event that an unlisted company has a prohibition in its constitution that would prevent it specifying an electronic means of receipt for proxy documents in a notice of meeting, it will need to take its own advice.