Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 334

Voting your shares: it’s worth the effort

Retail investors are rarely the most powerful voice in the room when they attend an Annual General Meeting (AGM) with institutional investors like super funds or managed funds holding many more shares. But where we lack power as individual shareholders, aggregating proxies can increase the leverage to bargain for what we want from a company. And when the big shareholders disagree about a resolution, retail shareholders can tip the vote and take it from ‘for’ to ‘against’.

Retail shareholder power

This is not an over-exaggeration of retail shareholder power. The most recent ASX Australian Investor Study released in 2017 found that 37% of the adult population holds exchanged traded investments. This number is likely to grow if current taxation structures remain in place. Research published in the RBA’s Quarterly Bulletin indicates that Australian taxation currently favours higher dividend payments to shareholders. The Australian Investor Study also indicates that the numbers of younger shareholders have almost doubled since previously measured.

Many retail shareholders are not represented by institutional investment organisations. This is an important factor in how corporate governance is shaping the many concerns people have about the world they live in. Studies (linked here and here) conducted by the Australia Securities and Investment Commission (ASIC) have consistently identified higher shareholder engagement as a hallmark of the last two AGM seasons.

Increased engagement has also led to better results. According to the ASIC reports cited, gender diversity within corporate boards was a major shareholder engagement issue in 2017. In 2018, this engagement reduced the number of boards without any women on them significantly. This is not to suggest that the issue of diversity has been resolved but it does provide a metric to measure the difference shareholder engagement makes when managed correctly.

Examples of shareholder action

Retail shareholder proxies have made a difference in many circumstances already. At its 2018 AGM, National Australia Bank saw 46% of their shareholdings or 1,267 million shares out of 2,734 million shares vote on its remuneration report with 957 million voting against and 189 million abstaining. Usually, an abstention vote includes protest votes that do not oppose a resolution but indicate their lack of support for it.

This engagement made a difference as it indicated in no uncertain terms what shareholders thought of the remuneration policy.

This was also the case with the Commonwealth Bank of Australia. Out of their 830,307 shareholders and 1,770 million shares, in response to the changes they made to their remuneration structure and culture, 45% of shares voted on the remuneration report with 733 million voting for, 58 million voting against and 4 million abstaining. It was a significant improvement from the previous year’s strike which signalled that the bank was regaining consumer trust.

Proxy voting arrangements

Reading these votes, interpreting them and ensuring that shareholder interests are significantly represented are why proxy voting arrangements are important. While there are several proxy organisations available to people, it is also worthwhile to understand what your proxy supports and does not support.

For institutional investors, proxy advisors often enable important decision-making that carry large resolutions. For retail shareholders, choices can be limited to maintaining a list of guidelines, having trained proxy representatives attend the meetings and ensuring nothing falls through the cracks.

While it is possible to lobby with proxy advisors and with institutional investors through a level of direct engagement, there are fewer organisations that provide retail shareholders with the ability to direct their proxies. What retail shareholders can look for in a proxy advisor is transparency. Knowing why votes are being cast enables a shareholder to see what their vote stands for.

While this may not be a guarantee with every organisation, a not-for-profit with a clear vision of advocating for retail shareholders, such as the Australian Shareholders’ Association, is a good one to bet on.

An established organisation with a history that can be verified as well as a voice that can ideally help amplify the retail shareholders’ voice can be significant in ensuring shareholder interests are represented at AGMs. For a well-established organisation, proxies can enable them to equate holdings that are among the top 20 in the company’s shareholder lists making it highly relevant for the company to engage with.

However, it is key to remember that all of this can only be done through proxies that are actively voted. Enabling a strong, well-governed corporate sector is within the power of retail shareholders but how they can amplify their voice is something they need to decide.

 

You can appoint ASA as a proxy by inserting 'Australian Shareholders’ Association' on the proxy form where it asks for the name of your proxy if you receive a paper notice for an AGM. The form needs to be returned to the share registry at least 48 hours prior to the AGM. If you want to know more about how you can appoint ASA as a proxy and what that might mean, you can read their FAQ here. Find out more on how you can appoint ASA as your proxy here.

 

Fiona Balzer is the Policy & Advocacy Manager at The Australian Shareholders Association, an alliance partner of Firstlinks and an independent, not-for-profit association for retail investors with its mission to both represent and educate investors. For more information www.australianshareholders.com.au.

 

RELATED ARTICLES

Why investment stewardship matters for long-term investors

Worries over the planned proxy rule changes in Australia

banner

Most viewed in recent weeks

Raising the GST to 15%

Treasurer Jim Chalmers aims to tackle tax reform but faces challenges. Previous reviews struggled due to political sensitivities, highlighting the need for comprehensive and politically feasible change.

100 Aussies: seven charts on who earns, pays, and owns

The Labor government is talking up tax reform to lift Australia’s ailing economic growth. Before any changes are made, it’s important to know who pays tax, who owns assets, and how much people have in their super for retirement.

Here's what should replace the $3 million super tax

With Div. 296 looming, is there a smarter way to tax superannuation? This proposes a fairer, income-linked alternative that respects compounding, ensures predictability, and avoids taxing unrealised capital gains. 

9 winning investment strategies

There are many ways to invest in stocks, but some strategies are more effective than others. Here are nine tried and tested investment approaches - choosing one of these can improve your chances of reaching your financial goals.

The rubbery numbers behind super tax concessions

In selling the super tax, Labor has repeated Treasury claims of there being $50 billion in super tax concessions annually, mostly flowing to high-income earners. This figure is vastly overstated.

With markets near record highs, here's what you should do with your portfolio

Markets have weathered geopolitical turmoil, hitting near record highs. Investors face tough decisions on valuations, asset concentration, and strategic portfolio rebalancing for risk control and future returns.

Latest Updates

Investment strategies

Finding income in an income-starved world

With term deposit rates falling, bonds holding up but with risks attached, and stocks yielding comparatively paltry sums, finding decent income is becoming harder. Here’s a guide to the best places to hunt for yield.

Economy

Fearful politicians put finances at risk

A tearful Treasury chief, a backbench rebellion, and crashing bonds. What just happened in the UK and why could Australia’s NDIS be headed for the same brutal fiscal reality?

Shares

Investing at market peaks: The surprising truth

Many investors are hesitant to buy into a market that feels like it’s already climbed too far, too fast. But what does nearly a century of market history suggest about investing at peaks?

Shares

Chinese steel - building a Sydney Harbour Bridge every 10 minutes

China's steel production, equivalent to building one Sydney Harbour Bridge every 10 minutes, has driven Australia's economic growth. With China's slowdown, what does this mean for Australia's economy and investments?

Investment strategies

Will stablecoins change the way we pay for things?

Stablecoins have been hyped as a gamechanger for the payments industry. But while they could find success in certain niches, a broader upheaval of Visa and Mastercard's payments dominance looks unlikely.

Infrastructure

An investing theme you can bet on for the next 30 years

Investors view infrastructure as a defensive asset class rather than one with compelling growth prospects. These five tailwinds for demand over the coming decades suggest that such a stance could be mistaken.

Investment strategies

A letter to my younger self: investing through today's chaos

We are trading through one of history's most confounding market environments. One day, financial headlines warn of doomsday scenarios. The next, they celebrate a new golden age. How can investors keep a clear head?

Sponsors

Alliances

© 2025 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.