Shareholder advocates, companies and legal experts are casting a careful eye over draft laws on technology neutrality before they get introduced to parliament next year.
Subscribe now for unlimited access.
or signup to continue reading
Existing rules on signing documents in person, holding companies to account at annual general meetings, and posting information to shareholders all changed last year as the COVID-19 pandemic struck.
Now laws are needed to replace the temporary measures that expire in March 2022.
The early draft of the Modernising Business Communications Bill shared by Treasury appears to allow and enforce shareholder choice, the Australian Shareholders' Association said on Friday.
When passed, companies will be able to send either digitised or hard copy documents, and in more categories, while allowing a response by shareholders either in hard copy or electronically.
"That contrasts to the COVID-concession which dropped hard copies altogether," an ASA spokeswoman said.
"That will be positive as electronic communications suit some shareholders, and hard copies suit others, for all manner of reasons - technology, remoteness, individual circumstance."
Business law experts at the Law Council of Australia generally support modernising document execution, electronic notices and online meetings.
"However, the details of any proposed change need to be carefully considered through an open and robust consultation process to identify and address potential issues," Law Council of Australia President Jacoba Brasch QC said.
The Australian Institute of Company Directors said it "strongly supports" the exposure draft of the bill.
"These reforms are critical to modernise and upgrade outdated provisions for the signing and sending of documents under the Corporations Act," an AICD spokeswoman said.
While the AICD supports electronic communications as the default method of communication, she said it was essential shareholders retained the right to elect to receive a hard copy.
A key feature of the bill is the proposed reform to enable the electronic distribution of documents to shareholders relating to takeovers.
The AICD supports this change provided certain safeguards such as civil penalty provisions, as proposed by the bill, prevent the misuse of contact information by a bidder.
But one measure not covered is the ability to lodge documents electronically with the Australian Securities and Investments Commission.
In most cases, lodgement is required in hard copy with an ink signature.
"This has caused considerable challenges during COVID-19 for individuals and organisations, particularly where lodgement of these forms can often be time critical," the AICD said.
The draft laws on modernising communications, released by Treasury for submissions by December 10, build on the the Meetings and Documents Bill introduced into parliament in October.
Australian Associated Press
