House of Representatives

Explanatory Memorandum

(Circulated by the authority of the Parliamentary Secretary to the Treasurer, the Hon Bernie Ripoll MP)

Chapter 2 - Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Corporations Amendment (Proxy Voting) Bill 2012

2.1 This Bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .

Overview

2.2 The Corporations Act 2001 (Corporations Act) requires listed companies to prepare a remuneration report, and put the report to a non-binding shareholder vote at the annual general meeting.

2.3 The Government has enacted reforms to prohibit key management personnel (KMP) from voting in remuneration solutions, although it provided an exception where shareholders give an undirected proxy to the chair of an annual general meeting, and the exception for the chair is contained in subsection 250BD(2) of the Corporations Act. However, some confusion has arisen as to whether this exception applies in respect of the non-binding vote required under section 250R.

2.4 The purpose of the Bill is to clarify that the chair of an annual general meeting, who is a member of the KMP or a closely related party of a KMP, is able to vote undirected proxies in the non-binding vote where the shareholder provides their express authorisation for the chair to exercise the proxy.

Human rights implications

2.5 This Bill does not engage any of the applicable rights or freedoms.

Conclusion

2.6 This Bill is compatible with human rights as it does not raise any human rights issues.