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IntelligenceReport> Insights from company meetings held in 2012 - AustraliaFebruary 2013certainty ingenuity advantageCOMMERCIAL IN CONFIDENCE1


Informe a los AccionistasInforme a la Junta Generalde Accionistas delBanco de Guayaquil S.A.correspondiente al ejercicio del año 2011De acuerdo a lo dispuestoen los estatutos delBanco de Guayaquil S.A.tenemos el agrado de presentarel Informe de Laborescorrespondiente al año 2011


Insights from company meetings held in 2012Attendance and votingA significantly smaller proportion of securityholders are attending meetings for companies in the ASX200 (0.13% in 2012) than isobserved for all companies. The difference is even more apparent in ASX50 companies where only 0.09% of securityholders walkedthrough the venue door in 2012. It appears that attendance may still not have yet hit its low.Proportion of securityholders attending by ASX indexASX 500.11%0.11%0.11%201220110.09%0.14%2010ASX 1000.12%0.12%0.13%20090.15%ASX 2000.13%0.14%0.13%0.00 0.03 0.06 0.09 0.12 0.152009 2010 20112012Figure 02: Larger companies see a significantly smaller proportion of shareholders walk through the venue door.5


Insights from company meetings held in 2012Attendance and votingVoting participation continues to increase in the ASX200Our analysis of Computershare client meetings shows that there is a two-speed voting pattern; while voting in companies ‘across theboard’ resumed its downward trend in 2012, voting participation is in fact much healthier in larger companies.Computershare clients in the ASX200 have seen a marked increase in the proportion of issued capital voted in the last four years;from 48.2% in 2009 to 62.0% in 2012, indicating that institutional holders are increasingly taking up their vote in larger companies.Proportion of issued capital voted by ASX index (all meeting types)ASX 50ASX 100ASX 20051.2%56.2%57.0%63.2%50.9%48.2%58.6%59.8%63.3%57.5%58.8%62.0%2012201120102009ASX Other42.1%41.4%42.3%36.5%0% 20% 40% 60% 80% 100%2009 2010 20112012Figure 03: Over the last four years, companies in the ASX200 have seen a marked increase in the issuedcapital voted across all meeting types.6


Insights from company meetings held in 2012Attendance and votingVoting ‘across the board’ appears to be resuming its downward trendIn 2012 the total number of securityholders voting across all Computershare client meetings slipped to 5.9%. The overall issuedcapital voted was 42.8%, the lowest level seen in the last four years. In 2011 we observed a marginal increase in voting whichpointed to a potential advance in securityholder engagement. However, an ‘across the board’ increase in engagement appears to bedebatable given the downward voting trend that resumed in 2012.Proportion of securityholders voting and issued capital voted (all meeting types)In a 2012 securityholdersurvey, Computersharefound that nearly half therespondents who said thatthey wouldn’t vote in 2012cited their small holding notmaking a difference as thereason.50%40%44.1%46.1% 46.3%42.8%“I am generally happy withthe direction of the companyand if I become unhappy Iwill sell out.”30%SURVEY RESPONDENT20%10%7.5% 6.6% 6.9%5.9%0%2009201020112012Issued capital votedSecurityholders votingFigure 04: Voting for all meeting types appears to have resumed its downward trend in 2012.7


Insights from company meetings held in 2012Attendance and votingOver the last four years, Scheme Meetings and AGMs have typically attracted the largest proportion of votes by issued capital. In2012 the issued capital voted by meeting type was higher for Scheme Meetings (59%) than any other meeting type, followed byAGMs, with 47.4% of issued capital voted.Proportion of issued capital voted by type of meetingAnnualGeneralMeeting42.8%48.3%50.6%47.4%20122011GeneralMeeting31.2%37.0%33.3%31.4%2010200939.4%SchemeMeeting54.4%61.5%59.0%0% 10% 20% 30% 40% 50% 60% 70%2009 2010 20112012Figure 05: Scheme meetings followed by AGMs have attracted the largest proportion of votes by issued capital.8


Insights from company meetings held in 2012Attendance and votingFew companies have adopted direct votingNine Computershare clients (predominently in the ASX50) offered direct voting in 2012, down from ten in 2011. While adoptedby only a handful of companies, the proportion of securityholders who vote in meetings where direct voting is used tends to bemarginally higher than in companies who do not use this voting model. We also analysed companies before and after they adopteddirect voting and observed no meaningful difference in voting participation.Proportion of securityholders who voted in meetings usingdirect voting vs. overall voting at all meetings in ASX508%7.5%6.8%7%6.4%6%6.5%6.2%5.4%5.9%5%5.3%4%2009201020112012Overall voting in ASX50Direct votingFigure 06: The proportion of securityholders who vote in meetings where direct voting is usedtends to be marginally higher than in companies who do not use this voting model.9


Insights from company meetings held in 2012Attendance and votingVoting reminders play an important role for companies who are looking to increase their overall voting participation. Companieswho issue a ‘reminder to vote’ to their securityholders in the days before the proxy close date see a noticeable increase in votingparticipation within a short time after the email communication is sent. A day after one company issued a reminder communicationin 2012, they experienced a fivefold increase in the number of holders who voted online and an uplift of twelve times the issuedcapital received compared to the previous day.Companies who issued a voting reminder in 2012- proportion of securityholderswho voted and issued capital received prior to proxy close date80%70%60%50%40%30%20%10%0%18 days13 - 17 days8 - 12 days 4 - 7 days 3 days 2 days 1 days Proxy close dateBUSINESS DAYS FROM PROXY CLOSE DATE% of issued capital received % of securityholders votedFigure 08: Companies who issue a voting reminder in the days before the proxy close date see a noticeable increase in voting participation.11


Insights from company meetings held in 2012Attendance and votingOver-voting continues to cause headaches for issuersThere has been plenty of discussion recently across the industry and in the media regarding the issue of proxy ‘over-votes’. Overvotingoccurs when more shares are instructed to be voted than the actual number of shares owned by a registered securityholder.It can occur when there is an imbalance between the perceived voting entitlements of individual investors whose shares are pooledwith other investors within a nominee holding and the actual (lesser) voting entitlements held by the nominee on the share register.The impact on issuers is significant; from meetings held in 2012, we identified 187 cases of over-voting affecting 117 issuers. Overvotingrepresented more than 20% of the issued capital voted for four companies and in the most extreme case, one issuer sawover-voting make up 56.8% its issued capital voted or 31.7% of its total issued capital.98.9% of the over-vote cases in 2012 were lodged via paper proxy forms. To encourage a reduction in paper proxies and combatover-voting, Computershare launched Intermediary Online in 2008; the only online service offered by a registry that is specificallydesigned to meet the needs of institutional investors. Intermediary Online supports real-time proxy processing which means thatwhen a lodged vote causes a securityholding to move into an over-vote position, an on-screen alert is immediately broadcast to theuser. In addition, if an over-vote occurs sometime after lodgement of an electronic vote, the custodian or nominee receives an alertabout the over-vote via email.Chasing over-votes is a time consuming and time critical exercise. It requires significant rework for all parties, mostly in the lasttwo days prior to the proxy cut-off date. Computershare endeavours to contact any proxy agent who lodges an over-vote position.In only three of the 187 over-vote cases in 2012 were we not able to contact the lodging agent and resolve the issue. However, theimpact on these three cases was that votes had to bedisregarded in their entirety. We then reviewed the resultsfor all resolutions put to meetings where there was anover-vote, and found that the inclusion of the over-voteposition would not have changed the outcome in all threeinstances.In our recent submission to CAMAC’s review of ‘The AGMand shareholder engagement’, we discuss how the currentpractice of custodians and nominees holding institutionalinvestors in pooled account structures rather than indesignated accounts named on the company register iscontributing to a number of market inefficiencies, includingthe issue of over-voting. The pooling of investors into oneaccount on the register means that over-voting cannotbe adjusted by a simple pro-rating down of votes ‘for’ or‘against’.What’s the differencebetween a ‘designated’ and‘pooled’ account?A pooled account is thecombination of client assetsheld through an omnibusaccount in the name of thecustodian or its nominee,rather than in individualaccounts for each underlyingclient. For example,HSBC Custody Nominees(Australia) Limited orNational Nominees AustraliaLimited.A designated account is thesegregation of underlyinginvestors into individualaccounts on the shareregister. For example,QIC Limited or INVIACustodians Pty Limited.Designated or segregatedaccounts can be establishedwithin CHESS and directly onthe share register, facilitatingdirect communications andvoting between companiesand shareholders.Figure 09: Computershare’s Intermediary Online supports real-time proxyprocessing which is helping to combat the incidence of over-voting.12


Insights from company meetings held in 2012Use of technologyA promotional flyer for the new module of InvestorVote accompanied the AGM mailpacks sent out to the securityholders of twocompanies. This offline campaign proved to be effective, resulting in a higher proportion of securityholders lodging their proxy viamobile compared with the overall average of the pilot.After the success of 2012, mobile device voting will be available for all Computershare clients to offer to their securityholders in2013. With strong consumer uptake of mobile device technology in Australia, we expect to see a growing proportion of votes lodgedvia this channel in the future.In the lead up to theirAGM in May 2012, AMP’ssecurityholders becamesome of the first in Australiato lodge their proxy votesusing a mobile device.Scan here to go directly to theAMP mobile voting websiteOur new mobile voting website is designed specificallyfor smartphones, so you can now vote on the go.Simply scan the QR code above with your smartphoneor log on to www.investorvote.com.au from your phone.You will need the control number, holder number andpostcode for your shareholding. These can be found inthe top right corner of your enclosed proxy form.To scan the code above you need to have already downloadeda free QR code reader application to your smartphone.Figure 12: A convenient way to vote; securityholders simply need to scan a QR code to access Computershare’s mobile device proxy voting service.To learn more about this service click here.“This is about keeping AMP’sAGM contemporary andrelevant as shareholderschange the way they viewand use information, andcommunicate with us. Thesite is easy to read anddesigned to suit mobiledevices rather than desktopcomputers.”MARNIE REID – AMP HEAD OFSHAREHOLDER SERVICES15


Insights from company meetings held in 2012Use of technologyInstitutional investors show strong support for straight-through processingAlthough institutional investors who voted online in 2012 accounted for only 0.4% of securityholders, this small group certainlymade their presence felt by lodging proxies online for nearly a quarter of the total issued capital voted.Since our launch of Intermediary Online in 2008, Computershare is the only registry to offer an online service specifically forinstitutional investors. This unique technology enables custodians and nominees who hold securities on behalf of institutions toswiftly lodge proxies electronically, ensuring straight-through processing for issuers’ largest investors. Users receive an immediatevote confirmation upon lodgement and are able to run real-time proxy status reports.Accounting for only 8.9% of issued capital voted in 2010, volumes have nearly tripled in the last three years resulting inIntermediary Online processing 23.3% of the total issued capital voted in 2012.Securityholders who voted by channelIssued capital voted by channelInvestor VoteTraditionalIntermediary Online201015.7%84.2%0.1%2010Intermediary Online15.4%Traditional75.7%8.9%IntermediaTraditionalInvestor VoteInvestor Vo201117.0%82.7%0.3%20119.0%76.5%14.5%201220.8%78.8%0.4%201211.3%65.4%23.3%0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%InvestorVote*TraditionalIntermediary OnlineInvestorVote*TraditionalIntermediary Online* Includes mobile device votingFigure 13: 23.3% of all issued capital voted in 2012 was submitted via Intermediary Online, a Computershare web service designed to meet the unique needs ofinstitutional investors.16


Insights from company meetings held in 2012Use of technologyUsing voting handsets at meetings maximises attendee experienceFaced with needing to hold two consecutive meetings on the same day in 2012, Woolworthsopted to use voting handsets instead of traditional voting cards, this allowed securityholdersto register for both the AGM and General Meeting at the same time.IML, a Computershare company, and Computershare Investor Services worked closely withthe company prior to the meetings, establishing the rules and protocols for voting anddetermining when results for each resolution would be available to view.At registration, hundreds of securityholders were swiftly provided with a personalisedsmartcard programmed with their specific voting privileges which was then inserted into anaccompanying IML Connector handset. When voting opened, attendees cast their votes usingthe handsets, which immediately recorded and processed the data and then added it to thetotal results.Using the handsets simplified the complex logistics associated with running two meetings,thereby providing comfort to Woolworths that voting was being managed efficiently. Thistechnology also ensured a better experience for their securityholders who did not need tore-register between meetings.“We’ve now used the handsetvoting system at the ANZ AGMsince 2006. It’s easy to use forthe shareholder, and enables thevotes cast electronically at themeeting to be tallied and displayedinstantly at the meeting – thisis a significant improvementcompared with using voting cardsand has most certainly enhancedthe AGM ‘experience’ for those inattendance.”JOHN PRIESTLEY –ANZ COMPANY SECRETARYExtending the AGM to an online forumWhile current legislation does not specifically authorise companies to offer their securityholders the opportunity to participatein an online AGM, the Corporation and Markets Advisory Committee (CAMAC) will no doubt address this as part of theirrecommendations to the government in response to their review of the ‘The AGM and shareholder engagement’.We have observed the virtual AGM taken to the extreme in the United States, where some states permit online-only meetingsand as a result a degree of securityholder scepticism has emerged. For example, securityholders have expressed fears that theirquestions have been prioritised, rephrased and ignored or responses have been delayed to be answered outside the meeting, andare therefore not on public record. Concerns have also been expressed regarding the transparency of securityholder questions andmanagement’s answers, as well as whether or not securityholder questions asked online are visible to everyone at the meeting.Retail shareholders are adept withtechnology and open to beingengaged via digital channels.66% of respondents in a recentComputershare survey said thatthey would participate in an onlineAGM if it was offered.In our submission to CAMAC, Computershare put forward our support for hybrid meetings – that is, a combination of the physicaland online AGM. We do caution however that it should ultimately be the company’s choice as to whether they adopt this practice.Computershare is ready to offer its clients an online AGM service pending confirmation that securityholders are able to participatein a meeting via this channel. We will continue to participate in industry dialogue on this matter.17


Insights from company meetings held in 2012Voting on the remuneration reportVoting on the remuneration reportThe Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Bill was passed in July 2011. Thislegislation introduced the ‘two strikes’ rule which was designed to provide investors with a greater say on executive remuneration.In 2012 the level of investor discontent about executive pay was higher in companies outside the ASX200 than in larger companies.An analysis of the proportion of votes lodged against the remuneration report shows that the average percentage was 5.5% in theASX50 versus 7.4% for all companies outside the ASX200.Average proportion of votes cast against the remuneration report in 2012ASX505.5%ASX1006.9%ASX2007.1%ASX Other7.4%0% 1% 2% 3% 4% 5% 6% 7% 8%Figure 14: Across the entire ASX, the proportion of votes cast against the remuneration report in 2012 was lower in larger companies than it was for those outsidethe ASX200.Data source: 2012 AGM results (all companies), Financial Review Business Intelligence, January 2013.18


Insights from company meetings held in 2012Voting on the remuneration reportFewer companies received a first strike in 2012 than in the previous yearIn 2012, 124 companies received either a first or second strike compared with 114 companies receiving a first strike in 2011. However,it should be noted that in 2011 only AGMs held from July onwards were subject to the new rule.Looking across the entire ASX, 15 fewer companies received a first strike in 2012 (99) when compared to 2011 (114). Two thirds of thecompanies who suffered a first strike in 2012 received 25-49.9% of votes against their remuneration report resolution, with nine percent receiving more than 75% of votes against this resolution. The highest percentage of votes against the remuneration reportresolution for an individual company was 95%.First strike - how securityholders voted on the Remuneration Report75% VOTES AGAINST REMUNERATION REPORT25-49.9%50-74.9%162324662012201175-100%90 20 40 60 80 100NUMBER OF COMPANIES2011 2012Figure 15: 99 companies across the entire ASX received a first strike in 2012, 15 fewer than the previous year.Data source: 2012 AGM results (all companies), Financial Review Business Intelligence, January 2013.19


Insights from company meetings held in 2012Voting on the remuneration report25 companies received a second strike in 2012114 companies (just over 6% of the entire ASX) received a first strike in 2011. Ten companies who received a first strike in 2011 did nothold an AGM in 2012 for a variety of reasons including:> > ASX suspension / delisting> > Corporate structure changes as a result of a takeover or Scheme of Arrangement> > Liquidation> > ASIC extension granted to hold the AGM at a later dateInterestingly, we observed that 65 of the 104 companies facing a second strike who did hold an AGM in 2012, held the meeting in thelast eight days of November.Nearly a quarter of the companies who received a first strike in 2011 received a second strike in 2012, requiring those companies tosubsequently take a vote on the spill resolution.Companies facing a second strike in 2012 - how securityholders voted0-9.9%55% VOTES AGAINST REMUNERATION REPORT10-24.9%25-49.9%50-74.9%31824201275-100%40 20 40 60NUMBER OF COMPANIESFigure 16: 25 companies across the entire ASX received a second strike in 201220


Insights from company meetings held in 2012Voting on the remuneration reportSpill meetings are still being held in 2013Of the 25 companies across the ASX who received a second strike in 2012, six companies received more than 50% of votes infavour of the spill resolution which required them to hold a spill meeting within 90 days of the AGM. At the time of writing, fourcompanies are still yet to hold their spill meeting.Penrice Soda Holdings Limited (PSH) was the first company required by the ‘two strikes’ rule to hold a spill meeting. After havingreceived more than 25% ‘no’ votes on the remuneration report resolution and more than 50% ‘yes’ votes on the spill resolutionat their AGM held on 30 October 2012, requirements stipulate that the spill meeting must be held within 90 days of the AGM. Thismeeting was held on 25 January 2013.At the spill meeting two incumbent directors, who under the two strikes legislation ceased to hold office at the conclusion ofthe meeting, offered themselves for re-election and were both successfully re-appointed. The company had also received threeadditional nominations for Board positions, but all three failed to get the required securityholder support.Companies who plan to holdtheir AGM and a spill meeting (ifrequired) on the same day shouldconsider replacing traditionalvoting cards with digital votinghandset technology at the meetingto enable securityholders toregister for both meetings at once.Click here to find out how thistechnology assisted a companymanage its complex meetings in2012.The second company to conduct a spill meeting was Globe International Limited (GLB). GLB received a second strike at their2012 AGM held on 14 November 2012. The remuneration report resolution received more than 85% of votes against, and the spillresolution received more than 85% of votes in favour which triggered the requirement to hold a spill meeting. The spill meeting washeld on 6 February 2013. The three directors who stood for re-election were all re-appointed, each director receiving almost 90% ofvotes in support of their re-election. There were no additional nominations for the Board positions.Careful consideration required for arranging a spill meetingWe also observed that three companies arranged for a spill meeting to be held on the same day as their AGM, in the event that theyreceived a second strike and the spill resolution was passed. This pre-arranged meeting was intended to avoid the substantial costsassociated with staging a second meeting within 90 days, although these companies did incur an upfront cost associated with theprinting and mailing of a second Notice of Meeting and proxy form for a meeting that might not take place. None of these threecompanies did in fact have to hold their spill meeting, although two of the three companies did receive a second strike.How they decided – show of hands or poll?Across all Computershare clients who held their AGM in 2012, we observed that 72% of clients decided the remuneration reportresolution via a show of hands while 28% of clients conducted a poll.Based on our review of all of the 104 companies facing a second strike at their 2012 AGM, we observed that the proportion ofcompanies who decided the remuneration report resolution via a show of hands was 52% with a corresponding 48% conducting apoll.For the 25 companies who received a second strike and then had to put a spill resolution to the meeting, the proportion ofcompanies going to poll on the spill resolution was 68% with 32% voting on the spill resolution by a show of hands.21


Insights from company meetings held in 2012Voting on the remuneration reportThe practical application of the two strikes legislation puzzles manyAn analysis of Computershare clients who were facing their second strike in 2012 revealsthat for more than three quarters of these companies, a higher proportion of proxy votesin favour of the spill resolution than against the remuneration report was recorded.Although for many companies the difference was marginal, in several the difference wassubstantial. In one extreme example, a company had its remuneration report resolutionpass by more than 95% on proxies, yet it had more than two thirds of proxies also vote infavour of the spill resolution.Our analysis indicates that the mechanics of the two strikes / spill resolution process is notyet fully understood by securityholders, and we suspect that this outcome will occur lessfrequently in the future as investors of all sizes become more familiar with the process.We believe the single most likely reason for these results is that securityholders whoare generally supportive of the company will vote in favour of all resolutions, withoutunderstanding that a vote in favour of the spill resolution is supportive of calling the spillmeeting. This is despite concerted efforts by companies to provide detailed explanationsof the process in their notices of meeting and proxy forms. This may mean that manysecurityholders either do not read meeting materials thoroughly or do read them but donot fully understand their content; a likely scenario given the significant legal technicalitiesthat the documentation is required to comply with.Computershare did observe the trend of proxies in favour of the spill resolution beinggreater than proxies against the remuneration report emerging in some of the earlymeetings of our clients who were facing a second strike. As a result we also communicatedwith the institutional investor community to explain how the two strike and spill resolutionprocess works.22


Insights from company meetings held in 2012Voting on the remuneration reportUse of express authority clarified for use on proxy formsOn 18 June 2012 Parliament passed an amendment to the two strikes legislation in order to make certain that the Chair can voteundirected proxies on the remuneration report resolution with an express authority. Prior to the long awaited clarification that thisamendment delivered most companies were adopting the ‘deemed direction’ approach on proxy forms (in accordance with ASICguidelines released in August 2011) and of these the majority were requiring securityholders to use a tick box to give that direction.Proxy form approach% of companies who used this approach for AGMsheld 1 Jan 2012 to 17 Jun 2012% of companies who used this approach for AGMs held18 Jun 2012 to 31 Dec 2012Deemed direction with a tick box 52.8% 0.4%Deemed direction with no tick box 30.2% 0.7%Undirected proxy votes not available to Chair 9.4% 0.7%Express authority with a tick box 3.8% 10.1%Express authority with no tick box 3.8% 88.0%Figure 17: Once legislation was amended in June 2012, the deemed direction approach was rarely used on proxy forms.The data in figure 18 above clearly demonstrates that once the legislation was amended, the deemed direction approach was rarelyused. We understand that of the small proportion of companies who did use this approach after 18 June 2012, most had preparedtheir proxy forms prior to the amendment being passed.After the legislative amendment, we updated our standard proxy forms to accommodate the granting of an express authority onthe remuneration report (and other remuneration related resolutions) without a tick box. An alternative form that incorporated atick box was also made available to clients on request. There seems to be consensus across the industry that an express authoritycan be granted without a tick box; as corroborated by the 88% of Computershare clients who adopted that approach for their proxyforms after 18 June 2012.Valuable votes continue to be lostAnalysis of a sample of companies who did use a tick box to authorise the Chair to cast their open votes on the remunerationreport, reveals that approximately two thirds of securityholders appointing the Chair as their proxy on an undirected basis did nottick the box which meant that their votes could not be counted on the remuneration report resolution.23


Insights from company meetings held in 2012What does the future hold for the AGM and shareholder engagement?What does the future hold for the AGM andshareholder engagement?In December 2011, the then Parliamentary Secretary to the Treasurer, the Hon. David Bradbury MP, requested that the Corporationsand Markets Advisory Committee (CAMAC) inform the government on:> > The future of the annual general meeting (AGM) in Australia, including how documents and meeting forms should change tomeet the needs of shareholders in the future.> > The risks and opportunities presented by advances in technology, in the context of maintaining the ongoing relevance andefficacy of the AGM.> > The challenges posed to the structure of the AGM by globalisation, including potential increases in international share ownershipand dual-listing.In September 2012 CAMAC released their discussion paper, ‘The AGM and shareholder engagement’, and called for industrysubmissions in response to the questions contained in the paper. 36 public submissions were received by CAMAC – these can beviewed here.Our review of these submissions affirmed to us that there is still strong support for the AGM and there is substantial backing forengaging with securityholders through a greater range of online communication channels.Computershare’s submission focused on improvements that we believe would benefit our clients; either as a result of addressingcurrent market inefficiencies, improving securityholder engagement or by lowering the costs to our clients of holding an AGMDominic Horsley,Computershare’s ChiefLegal Counsel andCompany Secretary,discusses the Corporationand Markets AdvisoryCommittee (CAMAC) reviewon the ‘The AGM andshareholder engagement’.He summarisesComputershare’s response,discusses the key themescontained in submissionsfrom across the industry, andhazards a guess as to whatmight be next for this review24


Insights from company meetings held in 2012What does the future hold for the AGM and shareholder engagement?Here are some of the key points from our submission:> > Computershare has been campaigning for some time now on what we believe is an obvious solution that will remedy marketinefficiencies caused by ‘pooled’ accounts, such as over-voting, transparency issues and timing concerns. Institutions andnominees should be encouraged to use designated accounts and consideration should be given to making designated accountsthe default for institutional securityholders. Rather than market participants such as custodians pushing for changes to thelegislative environment to overcome the lack of transparency caused by the administrative approach they adopt, they should beasked to explain why they cannot use designated accounts to solve the identified issues.> > In a recent Computershare survey, nearly 80% of securityholders said that they would prefer to receive their AGMcommunications electronically (email, SMS or digital mail box). However, our data shows that the actual average number ofsecurityholders who receive their Notice of Meeting via email is 18.5%. We therefore recommend regulatory change that allowscompanies to require securityholders to opt in to receive physical proxy material and Notices of Meeting. Issuers will benefit underthis change from a decrease in communication costs.> > We do not recommend moving the record date as it will introduce concerns about people voting who are no longersecurityholders by the time the meeting takes place. We believe that the Australian proxy voting processes are better than in anyother developed jurisdiction. In the United States the record date cannot be less than 10 days before the meeting and it is often 45days before the meeting. In our experience this results in ‘stale’ voting, where investors have sold out of the stock by the meetingdate. In some European jurisdictions, if you want to vote at all, you have to ‘block’ your shares (deny yourself the right to sell them)for an even longer period before the meeting.Although our own submission focussed on some suggested practical improvements to the AGM, other submissions proposedmore radical changes to the format of the AGM with some support for separating out the decision making function of the AGMand having voting take place outside of the meeting itself. We wait with interest to see how CAMAC will respond to the many andvaried opinions that have been provided in the submissions. However, we do expect that the AGM will be retained, albeit allowing forpotential changes to its format, and we certainly expect there to be strong support for making technology integral to the AGM in thefuture.25


Insights from company meetings held in 2012Highlights from around the globeHighlights from around the globeWhile we have provided a snapshot of meetings trends from around the globe in this report, we are also developing analysis basedon our global proxy research. This detailed analysis will be released later this year – pre-register here to receive this report.United KingdomVoting, as a percentage of issued share capital for FTSE 350 AGMs, has risen by 2.6% since 2010, as the introduction of the UKStewardship Code and increased media coverage have encouraged higher shareholder participation. There was also a 5% increasein FTSE100 companies experiencing a high degree of opposition to remuneration resolutions. On this issue, the UK is consideringadditional legislation in the future to give shareholders more say over companies’ remuneration policies.Northern EuropeShareholder activism took a slightly different form from that in other regions. When challenging boards over issues such asremuneration, shareholders chose to take more responsibility in their role as company owners, and focussed on discussing thedesign of longer term executive remuneration systems. In Sweden, there is provision for shareholders to suggest alternativeremuneration proposals relating to the pay of the board elected at the AGM.United States and CanadaBahrainLittletonThe greatest change in the US AGM space was the ongoing impact of the introduction of ‘Say on Pay’ rule, that gives shareholders anon-binding vote on levels of executive compensation. This vote is mandatory for all public institutions within the US, however manyCanadian companies voluntarily chose to hold a ‘Say on Pay’ vote to support good governance.In Canada, new Notice-and-Access regulations come into effect in February 2013 whereby issuers can choose to mail a Notice ofMeeting and include ‘Access’ information that, in lieu of the customary full proxy package, details where the proxy materials arelocated on the internet. Issuers will benefit from reduced printing and postage costs by using the Notice-and-Access method formailing proxy materials. These regulations have been in place in the United States for some time.IrelandIrish shareholders increased their participation in meetings during 2012, not only voting in greater numbers but also beingnoticeably more willing to verbally challenge the board at AGMs. This rise in opposition from shareholders has led to an increase inthe number of companies using proxy solicitation services.Maroochydore26


Insights from company meetings held in 2012Highlights from around the globeCentral and Southern EuropeLow level shareholder activism was seen across the region, with most companies experiencing little or no opposition. Germanand Dutch shareholders currently have a binding vote on the remuneration policy, whereas France is currently debating theimplementation of a ‘Say on Pay’ style shareholder vote. In Italy, the introduction of a ‘Designated Representative’ policy enabledshareholders to vote via a web portal.RussiaThe number of retail shareholders attending AGMs has decreased slightly over the last three years, while overall voting participationhas remained steady. If new legislation initiatives announced in 2012 are enacted, it will be possible for shareholders from across theregion to participate in AGMs online.China and Hong KongCompanies in Hong Kong and mainland China saw an increase of more than 44% in shareholder attendance from 2011, with thisfigure more pronounced for larger companies, while voting figures have declined over the same period.IndiaForeign Institutional Investors continued Bahrain to have a growing influence at AGMs, and collaborated with proxy advisors to activelychallenge the companies in which they held securities. Legislation now allows companies to dispatch AGM notices and annualreports by email, and it is compulsory for the top 500 listed companies to record a securityholder’s email address (where provided)for the electronic distribution of proxy information.LittletonSouth AfricaFollowing the enactment of the New Companies Act in May 2011, companies now need to obtain shareholder approval forremuneration policies, company financial assistance, conversion to no par value shares and adoption of a new MOI. This has led toan increase in the number of general meetings facilitated within the season and has seen higher numbers of shareholders voting.Although shareholder activism is not yet a major concern, it is growing and more campaigns are expected in the future.Maroochydore27


Insights from company meetings held in 2012Early planning will ensureyou’re prepared for 2013Did you receive a ‘first strike’ in 2012? Do you know who votedagainst your remuneration report and why?Who are the decision makers behind your top shareholdersand how will they vote this year? Find out how you can tap intothis intelligence by speaking with Georgeson, a Computersharecompany, the world leader in proxy solicitation and securityholdercommunication services.Do you regularly monitor the press, industry commentators andsocial media before, during and after your AGM? How will youmonitor and manage these channels as part of your communicationstrategy this year?Shareholders are demonstrating a clear preference for digitalcommunications – what can you do to meet these needs? Consideroffering your securityholders online and mobile device voting whichis also particularly helpful for overseas based shareholders.Ensure your list of Key Management Personnel (KMPs) and CloselyRelated Parties (CRP) is up to date and provided to the ReturningOfficer or their delegate.When designing your proxy form, include the Returning Officer ortheir delegate in your reviews to ensure best practice standards areadopted.If you’re planning to hold your AGM on a Monday, proxies will closeoff on a weekend which makes it difficult to contact relevant partiesand resolve any instances of overvoting. Ensure your proxy close-offdate allows sufficient time for any over vote positions to be rectified.28


Australian AGM VenuesAdelaideAdelaide Convention CentreNorth TerraceAdelaide SA 5000(08) 8212 4099www.adelaidecc.com.ausales@adelaideecc.com.auCapacity - 2,350The Adelaide Entertainment CentreCorner Port Road and Adam StreetHindmarsh SA 5007(08) 8208 2222www.theaec.netreception@theaec.netCapacity - 8,000Adelaide Festival CentreKing William RoadAdelaide SA 5000(08) 8216 8920www.adelaidefestivalcentre.com.aucontact@adelaidefestivalcentre.com.auCapacity - 2,000Hilton Hotel233 Victoria SquareAdelaide SA 5000(08) 8217 2000www.hilton.comadelaide@hilton.comCapacity - 750InterContinental AdelaideNorth TerraceAdelaide SA 50001800 633 8464www.intercontinental.comenquiries.adelaide@interconti.comCapacity - 540National Wine Centre of AustraliaCorner of Botanic and Hackney Rds.Adelaide SA 5000(08) 8303 3355www.wineaustralia.com.aunwc.info@adelaide.edu.auCapacity - 480Sebel Playford120 North TerraceAdelaide SA 50001800 885 888www.mirvachotels.comsales@sebelplayford.com.auCapacity - 450Stamford Plaza Hotel150 North TerraceAdelaide SA 5000(08) 8461 1111www.stamford.com.ausales@spa.stamfrom.com.auCapacity - 250BrisbaneBrisbane Convention andExhibition CentreCnr. Merivale and Glenelg Sts.South Bank QLD 4101(07) 3308 3000www.bcec.com.ausales@bcec.com.auCapacity - 2,032Brisbane Hilton Hotel190 Elizabeth StreetBrisbane QLD 4001(07) 3234 2000www.hilton.comallan.horne@hilton.comCapacity - 800Chifley at Lennon’s66 Queen Street MallBrisbane QLD 4000(07) 3222 3222www.chifleyhotels.com.au/brisbanereservations.lennons@chifleyhotels.comCapacity - 550Christie Corporate Centre320 Adelaide StreetBrisbane QLD 4000(07) 3010 9028www.christieconference.com.aulpedro@christiecorporate.com.auCapacity - 250Marriott Hotel Brisbane515 Queen StreetBrisbane QLD 4000(07) 3303 8000www.marriott.comrosie.blackmoore@marriott.comCapacity - 250Sofitel Brisbane249 Turbot StreetBrisbane QLD 4000(07) 3835 3535www.sofitelbrisbane.com.auH5992@sofitel.comCapacity - 1,100Stamford PlazaCnr. Edward & Margaret StreetsBrisbane QLD 4000(07) 3221 1999www.stamford.com.au/spbsales@spb.stamford.com.auCapacity - 300Gold CoastGold Coast Convention andExhibition CentreCnr. Gold Coast Highway &PE Peters DriveBroadbeach QLD 4218(07) 5504 4000www.gccec.com.ausales@gccec.com.auCapacity - 6,020Jupiter’s CasinoBroadbeach IslandGold Coast QLD 4218(07) 5592 8661www.jupitersgoldcoast.com.aujupitersgc@tabcorp.com.auCapacity - 2,300MelbourneComputershare Conference Centre452 Johnston StreetAbbotsford VIC 3068(03) 9415 5000www.computershare.com.aumeetingservices@computershare.com.auCapacity - 100Crown Towers8 Whiteman StreetSouthbank VIC 3006(03) 9292 6968www.crowntowers.com.auconference@crownmelbourne.com.auCapacity - 2,500


Australian AGM VenuesGrand Hyatt Melbourne123 Collins StreetMelbourne VIC 3000(03) 9657 1234www.melbourne.grand.hyatt.commelbourne.grant@hyatt.com1,120Sofitel Hotel25 Collins StreetMelbourne VIC 3000(03) 9653 0000www.sofitelmelbourne.com.auh1902-sb12@sofitel.comCapacity - 1,000Perth Concert Hall5 St Georges TerracePerth WA 6000(08) 9231 9900www.perthconcerthall.com.auinfo@pch.aegogdenperth.com.auCapacity - 1,729Four Seasons Hotel199 George StSydney NSW 2000(02) 9250 3100www.fourseasons.com/sydneycatering.sydney@fourseasons.com.auCapacity - 1,000The Langham(formerly Sheraton Towers)One Southgate AvenueSouthbank, VIC 3006(03) 8696 8888www.melbourne.langhamhotels.com.auvanessa.spiteri@langhamhotels.com.auCapacity - 360Melbourne Convention andExhibition Centre1 Convention Centre PlaceSouth Wharf VIC 3006(03) 9235 8210www.mcec.com.ausalesenquiries@mcec.com.auCapacity - 2,500Melbourne Park Function CentreMelbourne & Olympic Parks TrustBatman AvenueMelbourne VIC 3000(03) 9286 1600www.melbournepark.com.ausales@mopt.vic.gov.auCapacity - 1,100RACV Club501 Bourke StreetMelbourne VIC 30001 300 139 059www.racv.com.auconferencesandevents@racv.com.auCapacity - 500PerthCrown PerthGreat Eastern HighwayBurswood WA 6100(08) 9362 7574www.business.burswood.com.ausales@burswood.com.auCapacity - 1,800Celtic Club48 Ord Street WestPerth WA 6005(08) 9322 2299www.celticclub.com.auceltic.club@bigpond.comCapacity - 100Duxton HotelNo.1 St George’s TerracePerth WA 6000(08) 9261 8000www.duxtonhotels.com/perthevents@perth.duxton.com.auCapacity - 300Hyatt Regency Perth99 Adelaide TerracePerth WA 6000(08) 9225 1234www.perth.regency.hyatt.comperth.regency@hyatt.comCapacity - 1,000Perth Convention Centre21 Mounts Bay RoadPerth WA 6000(08) 9338 0300www.pcecwa.com.ausales@pcec.com.auCapacity - 2,500Sheraton Hotel207 Adelaide TerracePerth WA 6000(08) 9224 7722www.starwoodhotels.comevents.perth@sheraton.comCapacity - 820SydneyCity Recital HallAngel PlaceSydney NSW 2000(02) 9231 9005www.cityrecitalhall.com.auvenue.hire@cityrecitalhall.comCapacity - 1,238Computershare SydneyLevel 4, 60 Carrington StreetSydney NSW 2000(02) 8234 5000www.computershare.com.aumeetingservices@computershare.com.auCapacity - 60Sofitel Sydney Wentworth Hotel61–101 Phillip StreetSydney NSW 2000(02) 9228 9180www.sofitelsydney.com.auH3665SL07@sofitel.comCapacity - 1,050Sydney Convention CentreDarling Harbour NSW 2009(02) 9282 5000www.scec.com.auinfo@scec.com.auCapacity - 3,430Wesley Centre220 Pitt StreetSydney NSW 2000(02) 9263 5500www.wesleyconference.comwesconference@wesleymission.org.auCapacity - 875Westin Hotel Sydney1 Martin PlaceSydney NSW 2000(02) 8223 1111www.westin.com.auwestin.sydney@westin.comCapacity - 1,400


About Computershare LimitedComputershare (ASX:CPU) is a global market leader in transfer agency and share registration, employee equity plans, proxysolicitation and stakeholder communications. We also specialise in corporate trust, mortgage, bankruptcy, class action, utility and taxvoucher administration, and a range of other diversified financial and governance services.Founded in 1978, Computershare is renowned for its expertise in high integrity data management, high volume transactionprocessing and reconciliations, payments and stakeholder engagement. Many of the world’s leading organisations use us tostreamline and maximise the value of relationships with their investors, employees, creditors and customers.Computershare is represented in all major financial markets and has over 12,000 employees worldwide.©2013 Computershare Investor Services Pty Limited. Computershare and the Computershare logo are registered trademarks of Computershare Limited.All other products and services named are trademarks of their respective owners.IR.263.02.2013COMPUTERSHARE INVESTOR SERVICESYarra Falls 452 Johnston StAbbotsford VIC 3067Adelaide (08) 8236 2300Brisbane (07) 3237 2100Melbourne (03) 9415 5000Perth (08) 9323 2000Sydney (02) 8234 5000certainty ingenuity advantagewww.computershare.com.au

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