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A prominent investment manager has called for the government to scrap plans to permanently allow ASX-listed companies to conduct virtual annual general meetings (AGMs).
To allow companies to conduct business under the threat of the COVID-19 pandemic, this year the federal government temporarily allowed AGMs to be conducted online.
This experiment had shown retail investors were "unfairly impacted", according to Wilson Asset Management Chair, Geoff Wilson.
"Conducted in person, AGMs provide retail investors with the ability to directly and publicly ask questions of a company's board of directors," he said.
"The virtual alternative, as we have experienced this year, allows boards to omit, rephrase and reinterpret shareholders' questions."
Wilson said retail shareholders were very limited in ways they could get the attention of the board, and the AGM is the only practical way of communicating their concerns.
Wilson Asset Management operates a number of popular listed investment companies (LICs), such as WAM Capital Limited (ASX: WAM) and WAM Research Limited (ASX: WAX).
The Federal Treasury has currently opened public feedback on the proposal to permanently allow virtual AGMs. Comments must be submitted by Friday.
The timing of this submission period has also been criticised by investor groups, because it's happening right in the middle of AGM season.
Wilson urged his clients to submit feedback opposing virtual AGMs.
"We encourage you to join us in arguing for AGM transparency and accountability to be upheld."
Some institutional investors agreed with Wilson's sentiments.
"Virtual AGMs are a necessity during the pandemic but they can diminish shareholders' ability to ask questions and hold companies to account," said Australian Council of Superannuation Investors Chief, Louise Davidson.
"In the AGMs we have already seen this year, it is apparent that – like a Zoom birthday party — something is definitely lost in the new format."
Davidson, who represents 37 institutional investors that own an average of 10% of each ASX 200 company, criticised the timing.
"We are in the midst of the busiest period for company meetings and there are still hundreds of companies that are yet to test new technology and meeting procedure," she said.
"We need time to ensure the lessons from the temporary provisions are appropriately incorporated into the permanent rules."
