Lawyer wants to fix annual meeting blues

Chapman Tripp partner Roger Wallis says companies need to make their annual meetings more relevant. Photo/Supplied.

A corporate lawyer says annual meetings need to be held sooner and talk about future strategy to ensure they remain relevant.

Under company law annual meetings have to be held within six months of the financial year end for a company.

That means those with a June 30 year end balance date have until the end of the year to hold an annual meeting.

The average length of time for the 15 largest listed companies who have a June 30 balance date was 122.8 days last year.

But Roger Wallis, a partner at law firm Chapman Tripp wants companies to drop the average from four months to three and use the opportunity to talk about their future strategies rather than discussing financial results which are months old.

He says timeframes for full year financial result announcements and annual reports have compressed but annual meetings have stayed the same resulting in investors getting mainly out of date information.

"The result too often is that the ASM [annual shareholder meeting] is dealing with outdated information, looking firmly into the rear vision mirror."

"I don't think there is a good reason for that."

Under share market listing rules companies have three months from their balance date to produce an annual report but most are now doing it within 60 days, he says.

Companies have 60 days to report their full year financial result from their balance date but the average for the 15 largest listed companies with a June 30 balance date was 52.7 days last year.

Wallis described the time lag between the release of the annual report and the annual meeting as "huge white space."

"I don't understand why companies put all this effort into putting out an annual report and then choose to talk about it months later."

Wallis believes companies should also be focusing on talking about their future strategy rather than past financial results.

The NZX held its annual meeting on the last possible day it could this year. Wallis said the exchange had a good reason for this as it had a new permanent chief executive to present to shareholders.

Takeover target Tower also held its meeting towards the end of the cut off.

Wallis said those companies were facing exceptional circumstances and the NZX had also used the opportunity to talk about its future.

"There will always be ASMs at which there are matters of moment or controversy to be decided. But most are fairly routine - to authorise payment of the auditor's remuneration and re-elect by rotation a couple of directors.

"It is hard to conceive of a reason for not holding a meeting limited to this business as close as possible to finalisation of the annual report."