The Australian Shareholders’ Association “activists” are getting better by the year but it really is time chairman Ted Rofe moved aside because he’s just too soft. Also, check out our coverage of the ASA’s annual meeting earlier this year.

We started by attacking the companies for poor performance but have broadened this to include putting some pressure on big and small shareholder groups, regulators and the media for not sustaining enough pressure on the companies.

We have effectively set up in friendly competition to the Australian Shareholders’ Association which has about 6000 members and an average age of about 65.

Now, we’re all pushing in the same direction and I certainly hope they prosper but the time has come to take issue with the ultra-conservative stance of long-time ASA chairman Ted Rofe, a retired accountant from Killara.

The last straw came with events on October 27.

I gave Andrew White from The Australian the story about how Computershare was proposing this outrageous new constitution which required any external board candidate to have the written support of 50 shareholders or more than 10 per cent of the capital.

Sandy Easterbrook from the institutional proxy advisory group Corporate Governance International was quoted saying that he’d never seen such tough “keep-off-the-grass” provisions.

“Why was it put in? What is the problem?” he asked.

The story later read: “Mr Easterbrook said that measure was contrary to the basic corporate governance principal that shareholders, not directors, should retain control of the capital structure of a company.”

“If shareholders abdicated that control it would allow the company to “do a News Corp” – which has a two tier capital structure that has allowed the Murdoch family to retain control by issuing large amounts of non-voting stock without further reference to shareholders.”

The problem was that Ted Rofe was only quoted saying the 10 per cent hurdle was “a little tough” and then he actually came out in support of the 50 shareholder requirement saying that “some sort of hurdle is appropriate”.

The ASA is promising to vote against a whole range of directors this year but what is the point unless you encourage outside candidates to stand. Australia desperately needs a culture of contested corporate elections so hurdles as big as those put up by Computershare are anathema to good corporate governance.

Yet here we have the chairman of Australia’s only small shareholder pressure group saying it is okay for the incumbents to be appointed without the written support of one shareholder, yet anyone who wants to give them a bit of competition has to run around and find 50 written signatures.

I’ve kept my powder dry about the ASA and have spoken to their members at seminars in Melbourne and Sydney over the past few months. But it really is time they got a new chairman. Complaints coming out of the media, the institutions and the ASIC is that they are too weak under Ted’s leadership.

I had a chat recently with someone from ASIC who pleaded frustration at how soft and agreeable Ted was. He went on to say that it would make their job as regulator easier if the ASIC was constantly hounded by the ASA because they could use this as an excuse to go in harder when companies complain about the treatment being meted out by the corporate watchdog.

The pathetic treatment of Rene Rivkin recently is a good example. The cigar chomper had been outrageously recommending thinly traded stocks to clients of his tip sheet and then actually selling his large personal holdings to these unsuspecting subscribers without disclosing.

It was an appalling and misleading thing to do and ASIC failed to take away his licence. They slapped some pathetic enforceable undertaking on him and he trades on unscathed.

Anyway, Jon Faine’s ABC morning show in Melbourne read the front page story in The Australian and rang Ted for a quote. Much to their surprise he was actually praising ASIC for its actions, even though Mark Westfield had described the penalties in that morning’s Australian as like “whipping Rivkin with a damp lettuce leaf”.

Faine’s producer therefore rang me and I provided the “shock and anger” commentary to counterbalance Ted’s subservience to ASIC.

It came as no surprise to see Ted warmly praising Alan Cameron on Business Sunday this week. Sadly, the Packer show did not run any of my more critical comments.

I’ve also detected some resentment towards Ted’s leadership coming out of the Victorian branch of the ASA. The Victorian branch contains the ASA’s biggest asset and best performer, former National Consolidated finance director John Curry.

I’ve never spoken to John about Ted or either of their aspirations, but believe John would make a much better and more effective chairman if he wanted the job.


Given the amount of media that the ASA gets as the sole voice of small shareholders, it is remarkably that no-one in the media has ever profiled the organisation.

We sent an intrepid reporter along to this year’s ASA AGM and this is what he wrote:

What, no sandwiches?

By A Crikey Contributor

First Published March 2000

Hot on the heels of publishing its annual blacklist of laggard companies the Australian Shareholders’ Association set an ominous tone for the coming season at its annual meeting in Sydney on Friday. Membership is rising fast and there’s a renewed push to give greater numbers more clout in the corporate governance debates that are its bread and butter. What’s more, the ASA is increasingly being invited inside he tent:: there are about 180 corporate members which are largely publicly listed companies, and a handful of companies such as MIM and Suncorp-Metway even commend the ASA to their shareholders in their annual reports.

Irony abounded as the members gathered in the olde worlde surrounds of a third floor meeting room at the Sydney Club. In any other city, such surrounds have become a metaphor for the cabal of blue chip company directors so resistant to the complaints of suffering shareholders, the ASA’s bete noir. But as Rofe noted after the meeting, the Australia and Union Clubs are the real centres of power in the Harbour City. The Sydney club is a poor relation that the ASA uses partly because of an association with a previous director and partly because it offered cheap space once the Australian Stock Exchange moved to new premises in Bridge Street and stopped providing the ASA with free meeting rooms.

Membership of the ASA soared 58 per cent last year to 4875 in line with the rapid growth of shareholders across Australia, and has comfortably passed 5000 in the months since then, according to Rofe. With such momentum you might have expected a big turnout at the annual meeting.- but the 38 members and 10 directors there on Friday represented less than 1 per cent of the paid up membership.

Perhaps there is not much to complain about. But for one row of four elderly gents four seats back from the front, no-one asked a single question And for those four gents, the agenda was not the lack of women on the 10-man board, the lack of sandwiches at the back of the room (this was a lunch time meeting, after all) nor what the ASA planned to do about such and such a company’s low dividend pay out or company director “X”‘s option plan. They wanted to know things like how much it costs to print membership cards, or why one of their number hadn’t received his membership card when he had already paid two year’s membership in advance. (In the classic style of a company director faced with a thorny question in public, executive director Tony McLean asked the gent to see him after the meeting.)

To be fair, they also wanted to know what the ASA could do to get financial contributions from the millions of non-member Australian shareholders who benefit from the ASA’s public and behind the scenes activism, and what could be done to attract the new class of younger investors to the ASA fold. It’s interesting to note that the ASA is now in its 40th year since being founded by Victorian actuary and author Nick Renton and is still largely a grey roots movement. It nearly folded at least once, and as recently as five years ago had a membership of just 1525 people.

There are no easy answers to the membership question. Top of the agenda from the board’s perspective is to give the activists voting clout. Chairman Ted Rofe flagged a renewed effort to give rank and file activists some voting clout by developing a proxy voting system for members. One member was amazed that the ASA had turned down his request for the ASA to act as his proxy. Rofe said the legal advice at the moment is that the ASA – or any company for that matter – cannot act as a proxy: You have to be a natural person. But the ASA appears to have an ally in minister for shareholder democracy Joe Hockey, with whom it has raised the issue and who last week went on the offensive against institutional investors’ apathy when it comes to voting at annual meetings.

One well-tanned and youngish (for the largely blue rinse ASA) member even proposed that the ASA set up a proxy solicitation company to aggregate the votes of those complacent institutions. Don’t hold your breath, As Rofe noted, the instos are members of the AIMA and IFSA, so they are unlikely to welcome advances from the ASA. Those industry bodies’ lack of stomach for public debates on a given company’s corporate governance is another story, though it has created a void which the ASA has been able to fill.

As the recent “succession” debate at AMP has shown, instos prefer to do their work behind the scenes and according to ASA director and chair of the corporate governance committee Les Renfrey, the association is increasingly doing the same thing. The ASA only goes public about its concerns if they reach an impasse in private discussions with the company. Renfrey told the meeting the association is getting results this way – companies had dropped or modified proposals in the face of ASA opposition – though he didn’t give specific instances.

If they are getting results, it must be a good thing. But the method of achieving those results means a lot of issues only get discussed at the branch and committee level, without being communicated to the market or taking on board wider public input. It is to be hoped that the ASA’s need for the oxygen of publicity to advance its causes and swell its membership will keep it with at least one foot outside the tent of the corporate establishment, ready to shout its protest.