intelligence report 2012 - the agm and shareholder engagement

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> The AGM and shareholder engagement

November 2012

Intelligence Report

COMMERCIAL IN CONFIDENCE

Computershare Investor servICes IntellIgenCe report 1

Introduction

In December 2011 the Government requested that the Corporations and Markets Advisory Committee (CAMAC) undertake a review into the future of the Annual General Meeting (AGM). CAMAC subsequently released a discussion paper on 14 September 2012, outlining the four broad areas under consideration:

1. Shareholder engagement

2. Annual reports

3. Conducting the AGM

4. The future and format of the AGM

Throughout September and October 2012 Computershare surveyed over 2,300 shareholders via its online portal, Investor Centre. This survey set out to understand the opinions of retail shareholders in relation to the AGM and also understand more about their communication preferences.

About the survey respondents• 71% of respondents said that they were over the age of 51, 20% between 36 and 50, and 9% said that they were 35 or younger.

• 93.5% of respondents said that they were a personal investor. 6.5% of respondents told us that they were not a personal investor, however of this group three quarters said that their shareholding formed part of their Self Managed Superannuation Fund (SMSF), followed by 7% who identified themselves as employee shareholders.

• Aside from being referred to as ‘respondents’ in this report, survey participants are also titled ‘retail shareholders’ or ‘shareholders’.


I always attend the meetings

I never attend meetings

I occasionally attend meetings

2%

20%

78%

Being “a small shareholder with little influence” and “distance” are the most common reasons for 78% of shareholders saying that they never attend AGMs.

Shareholders who turn up to meetings indicate that they do so to engage with the board:

57% say that the AGM allows them to assess a board’s capability in governing a company.

23% say that they attend to ask questions of directors in a public forum.

“I like to hear what the directors say about the Company’s plans going forward.” “After the meeting I get most value if the senior officers of the company make themselves available for one-to-one discussion.”

Despite 22% of shareholders in this survey saying that they always or occasionally attend meetings, Computershare data shows that very few actually turn up. Average shareholder attendance at meetings for 2012 to date is less than 0.2%*.

* Based on Computershare clients

Do you attend Annual General Meetings for the companies in which you own shares?


< 5 days

11-20 days

I don’t review these materials or vote

5-10 days

21-28 days

22%

16%

21%

20%

21%

Shareholders are evenly divided about how much time they need to review AGM documentation.

78% of respondents want to receive their AGM documentation via a digital channel, however Computershare data shows that less than a quarter of shareholders actually receive this information online.

How much time do you need to review AGM documentation before voting?


I’m not interested

My small holding would not make any difference

I’m generally happy with the direction of the company, and have confidence in the decisions made by the board and management

No time or other more important commitments

I’m unsure of the voting process, it’s all too complex

Other

5%

49%

25%

5%

11%

5%

Nearly half the respondents who say they won’t vote this year cite their small holding not making a difference as the reason.

68% of shareholders say that they will vote this year. Historically these good intentions haven’t always translated to an actual vote, with under 7%* of shareholders voting in 2011.

“[My vote] would make no difference and generally happy with Board of Management.”

“I am generally happy with the direction of the company and if I become unhappy I will sell out.”

What is your reason for not voting?


Yes

Undecided

No, I would still not vote

25%

37%

38%

38% of shareholders who are not planning to vote this year said that they would be more likely to vote if they could do so until sometime after the AGM, thereby allowing them more time to consider the meeting’s proceedings before casting their vote.

Of the shareholders planning to vote this year, 63% thought that allowing shareholders more time to vote after the AGM would be a positive change.

In this situation would you be more likely to vote?


Always attend and participate in online meetings if they were available

Continue to only attend meetings in person

Occasionally attend and participate in online meetings

Other (please specify)

Continue to never attend meetings

56%

24%

6%

10%4%

Retail shareholders are adept with technology and open to being engaged via digital channels. 66% of respondents say that they would participate in an online AGM if it was offered. 73% of shareholders said

that they would prefer to ‘go paperless’ and vote online.

75% of respondents indicated that they were interested in being provided with voting results following an AGM.

Nearly three quarters of respondents said that they would like the results to be communicated to them via a digital channel (email, digital mailbox or SMS).

A virtual Annual General Meeting allows you to attend, ask questions and vote at the meeting completely online. If companies held online Annual General Meetings, would you:


Retail shareholders use a variety of online sources to keep up to date with news about companies in which they own shares.

0 20 40 60 80 100

Other news or industry commentator websites, blogs (pay to access content)

Other news or industry commentator websites, blogs (free to access content)

The company's Youtube channel

The company's blog/RSS feed

The company's Twitter feed

The company's Facebook page

The company's website

95%

1%

95%1%

18% 45% 37%

50% 28% 22%

97% 2%

4%

4%

6%

1%

93%

1%

11% 69% 20%

Occasionally FrequentlyNot at all

Where do retail shareholders most frequently go to source information about the company?

89% visit the company’s website.

82% visit free to access news or industry commentator sites.

50% pay to access content from news or industry commentator sites.

Aside from the annual report, how do you mostly source information about the company?

While only a small proportion of respondents indicated that they check out a company’s Facebook, Twitter, YouTube channel or blog to find information, retail shareholders have strong connections with social media – 78% use webinars and internet audio/video (for example, Skype), 35% use Facebook and 20% use YouTube.


About ComputershAre Limited

Computershare (ASX:CPU) is a global market leader in transfer agency and share registration, employee equity plans, proxy solicitation and stakeholder communications. We also specialise in corporate trust, mortgage, bankruptcy, class action, utility and tax voucher 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 transaction processing and reconciliations, payments and stakeholder engagement. Many of the world’s leading organisations use us to streamline 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.

For more information about the information contained in this Intelligence Report, please speak with your relationship manager or contact us here

©2012 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.

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intelligence report 2012 - the agm and shareholder engagement

Economy & Finance