REAL vs VIRTUAL: THE AGM DEBATE HEATS UP; EXECUTIVE BONUS PAYMENTS DURING PANDEMIC – THE ATO VIEW

29 Oct REAL vs VIRTUAL: THE AGM DEBATE HEATS UP; EXECUTIVE BONUS PAYMENTS DURING PANDEMIC – THE ATO VIEW

Welcome to the latest edition of our Business and Media Intelligence Update, which from now on, will land in your mailbox on Friday mornings.

REAL vs VIRTUAL: THE AGM DEBATE HEATS UP

• As Treasury consults on proposed changes to the Corporations Act that would remove any requirement for physical meetings, some influential investors have added their voices to the debate. The main concern is that the changes will hinder transparency, a view held by Vas Kolesnikoff, the head of Australia and New Zealand research at ISS. Cannings spoke with Vas last week to discuss what proxy firms and investors ware focused on this AGM season in our On The Couch podcast. Click here if you missed it.
• AFR columnist, James Thomson echoed the concerns, highlighting that AMGs provide one of the few times when the people in charge are forced to answer questions from shareholders. Also backing the need for in-person AGMs is Geoff Wilson, founder of the Wilson Asset Management, who is leading an army of 90,000 retail investors against virtual meetings. Wilson argues small shareholders are already disadvantaged compared to institutional investors, and virtual AGMs “tilt the balance of power to the big end of town.”

EXECUTIVE BONUS PAYMENTS DURING PANDEMIC – THE ATO VIEW

• Companies that receive pandemic-related government subsidies should not then pay executive bonuses or increase dividends, according to ATO second commissioner Jeremy Hirschhorn. Firms that do this risk a public backlash and will be seen as “exploiting” such measures. The warning comes after dozens of ASX companies were found to have received the JobKeeper wage subsidies while paying executive bonuses in financial 2020. Read more in The AFR here.

WHAT DO THE ARMED FORCES AND BUSINESS HAVE IN COMMON?

• The habits learned in the armed forces can be useful for business life, according to Gareth Tennant, former Royal Marine who is now an adviser to the Future Strategy Club. Organisations that are dealing with the pandemic best are those which were already prepared for the unexpected. Rather than trying to make precise forecasts about the direction of markets, Mr Tennant said companies should be involved in “war-gaming”, where they can discuss ideas that push the boundaries of what is possible. Read more of his war-like business tips in The Economist.

WORKING REMOTELY – A CASE OF BURSTS

• New research suggests that bursts of rapid-fire communications, with longer periods of silence in between, are hallmarks of successful teams, according to new research published in the Harvard Business Review. Those silent periods are when team members often form and develop their ideas. Bursts then help to focus energy, develop ideas, and achieve closure on specific questions. Read more of the findings here.

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