READ THE CASE study and answer base on the Ethics and Corporation in Business

Explain the concept of an investor relations program

Discuss Recommendations 6.2 and 6.5 of the ASX Corporate Governance Principles and Recommendations

Propose three things Meridian could do to implement the Recommendations

Thank you for agreeing to meet with me," says Terry Hargraves, a Meridian retail investor. "I know my shareholding is small and most CEOs wouldn't give me the time of day." Your new executive assistant, Matthias, did try to talk you out of meeting Terry, who he described as a serial pest, a retired pensioner with too much time on his hands. "You're very welcome Mr Hargraves, how can I help you?" Terry takes a piece of paper out of his pocket. "I received this letter from the Australian Shareholders Institute that I thought you might like to see." The letter is a request for an undirected proxy. The ASI claims that Meridian fails to engage meaningfully with its shareholders and wants to collect enough proxy votes to seek governance reform at the next AGM. You suspect there may be some merit to the ASI'S accusations. "Thanks for showing me this," you say. "Do you agree with the ASI?" "Well, I can say that you're the first Meridian CEO I've ever met in person. I don't get many updates from the company and there's very little information for in on the company's website." You explain the content of the Australian Shareholder Institute letter to the Meridian board. The directors are dismissive of your concerns. It seems each of them have had their own dealings with the ASI and have little to no respect for the organisation. "I've searched the Meridian website for governance information myself and there's not much there. What is available is scattered across multiple pages with no cross references. I also checked past attendance at our AGMs. Not many retail investors bother to show up." The directors agree the company website could use a revamp and the AGM would benefit from greater attendance but the discussion keeps going back to the ASI and the headaches they cause for company boards. "I wouldn't worry too much about the ASI," says non-executive director Mitch Krisetnsen. "Everybody knows they're in collusion with the hedge funds. They criticise public companies in the media to drive down their share prices then they short-sell." Mitch's criticism of the ASI misses the point. You need to formulate an investor relations program the board will understand the need for and resolve to accept... How many times has this board contemplated input from our investors?" you ask. How many times has this board contemplated input from our investors?" you ask. "When our security holders talk we listen," Mitch says. "Hell, we restructured the whole board based on the feedback you brought us from FundCorp." "FundCorp is a large institutional investor with direct access. I'm talking about the retail investors, the little ones." "Meridian has thousands of retail investors. How are we even supposed to engage with them all?" Mitch asks. Veda picks up her iPad and opens the Notes app. "Our CEO has proposed to us an investor relations program to better manage Meridian's relations with our security holders. We will now take a vote as to whether we implement the proposed plan. All those in favour of the plan please raise your hands. Thank you. All those against, please raise your hands. Thank you." She records the votes tally on her iPad. "The board resolves to... How many times has this board contemplated input from our investors?" you ask. "When our security holders talk we listen," Mitch says. "Hell, we restructured the whole board based on the feedback you brought us from FundCorp." "FundCorp is a large institutional investor with direct access. I'm talking about the retail investors, the little ones." "Meridian has thousands of retail investors. How are we even supposed to engage with them all?" Mitch asks. Veda picks up her iPad and opens the Notes app. "Our CEO has proposed to us an investor relations program to better manage Meridian's relations with our security holders. We will now take a vote as to whether we implement the proposed plan. All those in favour of the plan please raise your hands. Thank you. All those against, please raise your hands. Thank you." She records the votes tally on her iPad. "The board resolves to