Shareholder Communication

In this article I discuss the removal by CLERP 9 of previous restrictions on sending notices and annual reports electronically to shareholders as well as new rules permitting electronic authentication of proxies.

After I completed it, the Business Council together with the Australian Institute of Company Directors and Chartered Secretaries Australia, released a Discussion Paper outlining a number of new approaches Australia's listed companies might adopt to strengthen or improve their communication and interaction with shareholders.

The Paper, Fresh Approaches to Communication between Companies and their Shareholders, contains a section on the use of Electronic Media (pages 47-50) which makes the following observations:

an April 2004 study showed only 5.9% of shareholders elected to receive annual reports electronically when offered a choice

most shareholders were over 55 and this group has the lowest internet usage

the company's website should have a facility to allow shareholders to question companies and that all questions and answers should be posted on the website for a period of six months.