Frequently asked questions about the resolutions and agency agreement
- A. ABOUT ENTERING INTO THE AGENCY AGREEMENT
What does this agreement do?
It enables Market Forces’ representatives to sign on behalf of the shareholder a request for a resolution and a supporting statement to be considered at a forthcoming AGM. 100 shareholders are needed for such a request.
If I enter into this agreement appointing Market Forces as my agent what exactly does that enable them to do?
It enables Market Forces’ employees to sign a request to the company that the company include on the forthcoming notice of meeting for an AGM the requested resolutions and supporting statements, including a resolution on climate change disclosures and risk management. It also enables them to vary or withdraw the resolutions and statements.
The Agreement does not authorise Market Forces’ employees to do anything else.
Why might I consider appointing a Market Forces representative as my agent to propose resolutions and statements?
Because you might be worried or unhappy as a shareholder about what a company in which you have shares is doing!
Appointing people that work for Market Forces as your agent online saves you the time and hassle of printing, signing and posting back resolutions and supporting statements.
What is Market Forces?
Market Forces is an affiliate project of Friends of the Earth Australia. Market Forces exists to work with others to shift finance and investment out of environmentally destructive activities and into those that protect and enhance the environment.
Market Forces believes the banks, superannuation funds and governments that have custody of our money should use it to protect not damage our environment.
Our work exposes the institutions that are financing environmentally destructive projects and helps Australians hold these institutions accountable. We work with the community to prevent investment in projects that would harm the environment and drive global warming.
For more information about Market Forces, please see the About page of our website: https://www.marketforces.org.au/about
For more information about Friends of the Earth, please visit: www.foe.org.au
Is there a cost involved
Will there be any obligation upon me to actively assist with the lodgement of resolutions or requests to the company in focus?
Are there any tax administration or tax liability consequences of entering this agency agreement?
Is there any chance I will suffer non-tax costs as a consequence of entering into this agency agreement?
No. Where statements or resolutions need to be distributed by the company to all shareholders for an AGM, the Corporations Act provides for these arrangements to be made at the company’s expense. The agency agreement will only be used to make a request for a distribution of statements or resolutions.
What happens if I disagree with the content of a proposed resolution or statement?
Don’t sign up. And if you already have, you can withdraw from the agreement by emailing us at email@example.com
Will it become widely known that my name has been used?
It is possible, though not likely. If you enter into this agreement, the company will know that you are one of many shareholders proposing the resolutions and statements. Companies typically do not make this information available, however it is up to them whether or not they make any use of that knowledge.
What is the difference between appointing a proxy and entering into an agreement like this?
This agreement deals solely with proposing a resolution or distribution of statement in advance of an AGM. A proxy is a person who attends a meeting for another shareholder and votes for them. You can enter into this agency agreement and still appoint whoever you choose as your proxy.
- B. ABOUT SHAREHOLDER STATEMENTS & RESOLUTIONS IN GENERAL
How can shareholders “have their voice heard?”
The first step of course is to have the matter of concern thoroughly researched. The next step is to undertake some dialogue with the company concerned. This may lead to shareholders requesting the company distribute a statement or consider a resolution at a shareholder meeting.
How do company annual general meetings (AGMs) work?
At AGMs the board of directors and the management of the company discuss the operations of the company with the shareholders. Shareholders get the opportunity to attend and ask questions and vote on any resolutions, including resolutions proposed by other shareholders.
Does a resolution have to get 51% of the vote to be “successful”?
No. The most successful resolutions get withdrawn. That often means the board has agreed to act in accordance with the proposal or change its behaviour due to the concern expressed by shareholders. Market Forces expects the companies to negotiate about the resolutions and statements before they are lodged.
When voted upon, special resolutions to change the Constitution need 75% shareholder support. Ordinary resolutions need 50% shareholder support. Even if the resolutions proceed but fail to win the required shareholder support, it will often still have a significant influence on the operations of the company. Sometimes, the same resolution has to be put a few years in a row, slowly gathering support. Once support has reached 10 to 15%, proponents generally view their actions as having been successful. This is because change is usually triggered by this level of support.
How many shareholders do you need to be able to put a proposed resolution to an AGM?
For registered companies in Australia such as Commonwealth Bank, Santos or Origin Energy, under the Corporations Act, 100 shareholders can request a company distribute a notice about a matter of concern to the shareholders in the notice of AGM. Similarly 100 shareholders can lodge certain resolutions for consideration by all shareholders at their next AGM.
Oil Search Ltd is a company registered in Papua New Guinea so the rules are different.
- C. ABOUT THE PROPOSED SPECIAL RESOLUTIONS TO CHANGE COMMONWEALTH BANK’S CONSTITUTION
If I wish to participate exactly what shares do I need to hold?
You need to hold fully paid ordinary shares. Only holders of these shares have the right to support resolutions for consideration at AGMs, as they are eligible to cast a vote at the upcoming AGM.
What will the resolution request?
The resolution is a special resolution that requests changes to the Constitution to embed climate change risk management and upholding Commonwealth Bank’s claim to support the 2 degree limit to global warming above pre-industrial levels into the company’s governance. Directors would be required to manage the bank’s operations in line with this outcome.
Can you show me the resolutions?
Yes, please click here to see the Special Resolution and supporting statement.
You can support the resolutions either by downloading these documents, filling them out and mailing them to Market Forces, c/0 Friends of the Earth, PO Box 222 Fitzroy, 3065, or by going back to the main resolutions page and completing the Agency Agreement, which allows a Market Forces representative to complete the form on your behalf.
Can you show me an example of the Agency Agreement?
Will the resolutions likely enjoy any support from institutional shareholders?
Will you endeavour to meet with company management prior to lodging the resolutions?
Yes. We have been in discussion with Commonwealth Bank about their climate change policy and lending activity until a few months before creating this resolution.