AGM Season 2021 - the Rules Have Changed Service Sheet
Boards will face unprecedented scrutiny in the 2021 AGM season. The rules have changed. There are new expectations of accountability and transparency, and a firm’s social license to operate will be in the spotlight as never before.
We expect the main themes this year will include:
ESG – Who Cares Wins
Management of Environmental, Social, and Governance (ESG) issues will be a key topic of the AGM season. Companies must proactively explain steps to address ESG risks relevant to their business. Pressures are building from all stakeholders, including the investment community. Remuneration
The issue of remuneration and incentivisation is always highly sensitive. Boards will face pressure on this issue, especially if compensation remains high despite poor financial performance.
ASX-listed companies are being pressured to disclose JobKeeper subsidies and some firms received JobKeeper without subsequently experiencing the threshold reduction in revenue. These firms will be under public pressure to return the money. Managing this sensitive issue will be critical.
COVID-19 Vaccines – to Mandate or Not?
It has been left for businesses to decide whether to mandate vaccines or not and bear the consequences of the decision. This has placed some Boards in a difficult position. Company policy requiring evidence of vaccination status may also raise privacy issues. Expect scrutiny of these issues at AGMs.
Diversity and Sexual Harassment Reporting
Reporting on workplace diversity and misconduct has become a focal point. The public now expects disclosure around culture and safety issues, especially sexual harassment. The value of accountability goes well beyond market disclosure.
Disruption and Competitive Threats
The pandemic has accelerated digital disruption in all areas of the economy. How Boards position their firms against this new age of digital disruption will dictate the market’s confidence in the future.