Canberra-based shareholder advocacy group the Australasian Centre for Corporate Responsibility (ACCR) says it plans to appeal against the judgment in its test case against Commonwealth Bank.
The case centred on the rights of shareholders to put resolutions to the AGMs of Australian companies. It stemmed from the ACCR putting a resolution to the bank calling on it to report on its financing of carbon emissions.
When the bank declined to put it onto its AGM agenda, the ACCR took the matter to court, hoping to set a precedent in a country where shareholder resolutions are rare.
But Judge Jennifer Davies in Federal Court in Melbourne on July 31 ruled that, in effect, companies only have to put resolutions to change the company constitution at company AGMs. In her 17-page judgment Davies cited precedent that AGMs aren’t “the proper forum to determine matters of management”. (See RI Report)
One person close to events told RI the decision was a “tragedy”. Now the ACCR, a not-for-profit association promoting ethical investment, says it plans to appeal the ruling, which it reckons puts Australia behind other countries where shareholder resolutions are an accepted part of corporate culture.“ACCR will continue to fight for corporate democracy and accountability,” said its Executive Director Caroline Le Couteur. “We are planning to appeal.”
ACCR is modelled on organsiations such as the UK’s ShareAction and Ecumenical Council for Corporate Responsibility, and the Interfaith Center on Corporate Responsibility (ICCR) in the US. Le Couteur herself is a former Green party politician and ex-Executive Director of fund firm Australian Ethical Investment.
Only about a dozen shareholder resolutions have been filed in Australia in the last decade; they were mostly special resolutions, seeking to change companies’ constitutions.
It comes as Commonwealth Bank’s advisory role to Australia’s biggest coal project, Adani Mining’s proposed and controversial Carmichael Mine in Queensland, has come to an end, according to media reports.
Le Couteur said this removes a large potential exposure to stranded fossil fuel assets from the bank and was a positive in terms of climate change risk. The ACCR had filed a resolution on climate change risk at the bank last year.
Focus will now shift to the shareholder resolutions that the ACCR has in the pipeline at Australian energy firms.