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“Believe it or not I’m not too good at blowing my own trumpet” was the response I got from one of our Senior Client Managers when I asked him about a problem that occurred with a client’s Notice of Meeting.

The client sent through to Automic their Notice of Meeting and Proxy Form draft as part of the preparation for their General Meeting communication.

“It’s good practice to read through the Notice to ensure that references to Automic are correct and voting procedures are stipulated correctly. I’ve always been taught to digest everything in the Notice, not just the parts relevant to the registry – on a side note you’d be amazed at how many times I’ve read through a Notice and the company’s ABN has been incorrect”.

This particular Notice included 2 resolutions for the consideration of issuing director shares. Issuing any type of security requires a voting exclusion statement advising which shareholders are excluded from voting, so we know to look out for this statement in the Notice. The exclusion statement basically advises that any shareholder who is subject to receiving shares as part of the resolution is excluded from voting on that resolution.

However, where shares are being issued to a Director, there are additional requirements as they are considered to be remuneration related resolutions. Particularly the requirements around voting on remuneration related resolutions as a proxyholder who is a member of the Key Management Personnel (KMP). There is a specific voting “Prohibition Statement” that stipulates that where a vote is left undirected (open) and the shareholder has nominated a member of the KMP as their proxyholder, that proxyholder is prohibited from voting the undirected votes as it is deemed they have an interest in the outcome of the resolution. However, the above prohibition does not apply if: (a)the proxy is the Chair; and (b) the appointment “expressly authorises” the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with remuneration of a member of the KMP.

This “Prohibition Statement” was missing from the Notice. This would have prohibited the Chairman of the Meeting from voting any undirected proxies in favour of this resolution, as a closely related party/member of the KMP, when it came to voting at the meeting, which in turn could have meant the resolution failed to get over the line (it is quite often the case that the undirected votes are required to get the resolution passed).

The outcome here, was that the client was informed in a timely fashion allowing them to send the Notice, with the inclusion of this statement, thus avoiding potential lost time and money associated with a full resend of the Notice which would have been required otherwise. While this should have been picked up by the company’s lawyer, it’s reassuring for all of our clients to know that at Automic our goal is to deliver service excellence always.

Paul Williams, Director of Automic.

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