How the Australian Shareholders Association stands up for Aussie investors

Our next speaker is Stephen Mapp from the Australian Shareholders Association, ASA.

Stephen is the chair of the ASA board.

The ASA has helped educate and stand up for shareholders for over 60 years.

As a known for profit and mostly run by volunteers,

ASA are a community of diverse investors who engage directly with the top ASX listed companies and represent the interest of the individual shareholders.

Steven is going to tell us how the ASA stands out for Aussie investors.

Over to you, Steven.

Good afternoon, everybody.

Stephen Mab's my name.

I'm the chair of the Australian Shareholders Association.

And thanks so much to Investment Markets for giving us the opportunity to present a little more about the ASA to you this afternoon.

Now, we have a presentation put together for you.

And essentially, a quick overview of the ASA.

We were established over 60 years ago, and our goal is all about representing individual shareholders.

It's really the leading independent community of retail or individual shareholders.

And we're a little unique as well in that we have access and relationships with the board and management of many ASX listed companies, which is what we're going to tell you a little bit more about today.

So what does the ASA do?

There's really two things that we focus on.

Education, of course, is one of them, where we have a range of ways that our members can learn more about listed investments and the companies that are listed on the ASX.

And we do that through webinars, podcasts, conferences, all of those kinds of exciting things.

But then the other thing that is quite unique and that very few other organizations help individual shareholders with is what we call advocacy.

And that's basically where we help to stand up for individual or retail shareholders' rights.

And the way that we do that is something we call, or the main way we do it is something we call company monitoring.

And basically what happens is we have a team of members and volunteers across the country that engage with pretty much the top 200 companies at the moment listed on the ASX.

And we meet with their boards and management normally once a year or more often and talk through what's in their annual reports, what are the things that they're taking to their annual general meetings and asking their shareholders to vote on.

And there's some particular focus issues that we hone in on there.

So this is an example of the focus issues from this year.

And what we've honed in on is the directors or the boards of the company, and are they well put together?

Are they diverse?

Are they well skilled?

Is it easy for shareholders to figure out whether they should or shouldn't be voting in favor of a particular director that's up for election?

The second thing we focus on is remuneration and culture of the organization.

So here we're talking about the way that the management personnel, the CEO, et cetera, are incentivized.

Are those incentives fair?

Are they balanced?

Are they aligned with their shareholders and other stakeholders?

And then around a lot of those things too, are they helping build the culture and the sustainability long-term of the company?

We also hone in on risk management.

Is the company addressing the relevant risks that are coming up for that particular organization?

And then finally, shareholder participation, particularly around things like capital raisings when companies come to the market and ask for more shareholder capital.

Are they doing that fairly?

Are they treating all their shareholders evenly and appropriately?

And basically the monitors will dig into all of those things with the companies.

They'll make sure they understand where the company is coming from on those particular issues and resolutions that they're putting to shareholders for the year.

And then the monitor will come away and review all of that against the guidelines that we have in place and determine whether we recommend that you should or shouldn't vote in favour.

of each of those resolutions at annual general meetings.

Now we know lots of shareholders don't do that.

A lot of the time you get the notice of meeting in the mail or in the email, whatever it might be, and a lot of people don't participate.

They've just been out because they don't think it makes a big difference or they haven't got the time to do it, whatever it might be.

So the good news is, the ASA can help you with that, and I'm going to talk about that in a moment.

But to give you an example of the way that we handle voting recommendations, this particular slide here touches on Domino's Pizza Enterprises.

And I've just picked that out as a random example of one of the companies that I monitored last year and just painted on the two most important areas.

So what is it that we're sharing with shareholders or what is it that we're communicating to individual shareholders?

Firstly, what we think are the key matters for the AGM.

So here are the examples from this year's report.

We talked a little bit about what's been going on with Domino's in general and then also what impact they think inflation is likely to have on them in the year ahead and any concerns about their individual and international markets.

We also wanted to talk about the changes the board was proposing to the remuneration structure and just making sure that we understood that properly.

Four of the directors didn't hold at least one year's fees in shares at this time so that was you know around the issue we call skin in the game where we like directors to have some of their own funds invested in the company so that they're aligned with shareholders.

The chairman Jack Cowen he was seeking re-election

If he was re-elected, that would see him notch up 12 years as chairman of the company.

So we wanted to ask there about his future plans and his succession that he might have in place.

And then finally, the company stated that they wanted to be a really efficient, sustainable business going forward and that delivery was the future of the company.

So we wanted to dig into the measurements they're using there and how they plan to achieve that so shareholders were well informed.

So after working through all of those things, we then put together our voting intentions.

And this is an example of the six issues or items that were up for election at the Domino's AGM this year.

And you can see there the remuneration reports, one of them, whether we suggest you support that or not, the re-election of James Cowan, the re-election of another one of the directors, a couple of items around the incentive plan for the CEO, and then more of a procedural one at the end there about proportional takeover bid provisions.

Now we know that's pretty dry stuff and a lot of people don't love digging into that or reading a long annual report.

So this is an example of where the ASA would do that work for you and come up with our suggestions on how you should vote as an individual or retail shareholder.

So if that's something you're not doing yourself or you'd like some help with, how do you do it?

Well, basically what you would do is allocate the ASA as your proxy if you didn't intend to vote or didn't intend to go to the meeting, fill out the forms, whatever it might be.

There's a couple of ways you can do that.

You can contact the share registry and

give them your hint and ask them to allocate Australian Shareholders Association as your proxy to vote on your behalf with all the companies you own with that registry.

Or alternatively, you can write Australian Shareholders Association into the proxy box when you get the notice of meeting form or when you get it in the mail, on your email, however you receive it.

So that's something you have to do every year if you're going to write it in individually for each company.

But if you're not voting, you're really not having your voice heard, you're not really being represented, and the chair of the meeting will normally vote your particular shareholding, however he or she sees fit if you're not voting on your own behalf or nominating a proxy to do it for you.

In terms of how impactful this is, typically the ASA's proxies peeled together are often in the top 20 largest shareholder list as a group, so we do have a little bit of clout in terms of our ability to influence votes.

We have roughly around $4 billion worth of proxies every year that are allocated to us, so it's a pretty significant

amount.

And most of the companies do take their engagement seriously with the ASA.

They realize that we're the best representative of their retail shareholder base.

So we do have a good working relationship with most of the companies.

And I think, you know, in terms of why you would want to do this, as I said, it's just much better than not having your voice heard at all.

So that's a bit of an overview of how we recommend that you could get a little bit more engaged as a shareholder and how you could have your voice heard more often than it might be at the moment.

If you're interested in more information, please feel free to visit Australianshareholders.com.au.

That's our website where you can find out a lot more about us.

And for all of you that are attending the event today, feel free to take advantage of a special complimentary offer that we're providing for the Investment Markets Summit today.

There's a coupon code there, ASAIM23.

And if you're interested, you can sign up for a complimentary 12 month membership with the ASA using that coupon code.

And that's normally valued at 150 bucks.

And if you want to talk to us about any of those things or you want to have a chat, all the contact information is on the website.

So feel free to reach out and we'll happily answer any questions that you might have.

So with that, I want to thank you again for tuning in.

I hope you found that interesting and potentially helpful to your future investing journey and enjoy the rest of the event.

Thank you, Stephen.