Budding shareholder activist Neal Woolrich got his first taste of Jack Tilburn at the Boral AGM yesterday and reckons the old war horse has completely lost the plot.

The Boral AGM was always going to be a fiery affair, with a slump in profits and the candidature of Greenie Christine Milne for a Board position, up against the incumbents in Chairman Ken Moss and Elizabeth Alexander. Shareholders were greeted at the door of Sydney’s Wentworth Hotel by a Green protest banner a good 15 foot long piece, presumably made out of recycled materials and adorned with environmentally friendly paint.

A couple of execs sitting near me at the front of the room were running a book on how long the meeting would go the bookies were tipping between two and a half to three hours. The more conservative estimate proved prescient.

Boral Green shareholders appear a pretty well organised group, with about half of the questions asked of the Board during the meeting being environment-related. But from this observer’s vantage point, it didn’t appear that they landed any point-scoring blows.

There was an accusation that the company had bought wood from an area where about 400 koalas lived. This was denied by the Chairman and later the inquisitor “agreed to disagree” on that one. In any event, the Chairman noted that it was not Boral who decided where logging could and could not take place, so that issue was best addressed by the relevant Government authority.

The Chairman and the Managing Director devoted a substantial part of their respective addresses to outlining the company’s approach to the environment and Boral’s “sustainable development diagnostic tool”. When questioned about when we can expect to see results of the diagnostic, Chairman Moss said it was “early days yet” but once the company could garner meaningful results from the diagnostic tool, it would release them to shareholders and the market.

In other words, once there is anything that they could possibly put a positive spin on, they would.

Boral has obviously had environmental issues in the past and will not be able to avoid them given the nature of its business, but today they are probably not the environmental villains they may have been in the past. But if there are ongoing issues which are being lost in the company’s positive spin, hopefully conscripts in the Crikey army will have the inside story.

Boral did it tough again on the financial front in 2001, with most of the performance indicators down, but surprisingly the share price has gone up almost 80% in the past 12 months. The Chairman attributed this to the market’s perception that the company is putting in place the right structure to capitalise on an upturn in the market and repeatedly said that the result was a good outcome in difficult conditions. But this wasn’t enough for some.

Enter Crazy Jack.

After various questions, the Chairman gave the floor to “microphone number 5” amid a chorus of groans. Crazy Jack had a hand-written slogan on a piece of scrap paper sticky-taped to his chest which said “VOTE NO MOSS”. Any doubts about his sanity (or lack thereof) would have been put to rest by this display.

The Crazy One started off his first rant by trotting out a series of statistics which any monkey could have inferred from a quick read of the accounts “Sales, down 18.2%, Net Profit, down 9%, EBITDA (CJ had trouble getting the tongue around this one) down 19.9%, 05” After at least three minutes of this rubbish, where he eventually referred to the result as “depressing”, he paused and said “Question: Is Boral heading for extinction?” Crazy Jack is obviously not a fan of hyperbole.

Silly me I thought that was the end of CJ’s rant. But the old war-horse had plenty of juice in the tank. And this was only the first of at least half a dozen questions.

He then went on to trot out Boral’s various rankings in the SMH/Age “Good Reputation Index”, which has been maligned beyond precedent in various outlets since its publication. CJ’s first spray would have clocked in around the five minute mark before the Chairman was finally given the chance to respond.

Chairman Moss pointed out that he sees “the cup as half full” and repeated his assertion that the results, while worse than last year, were a good outcome in difficult trading conditions. This earned the chairman a rousing round of applause. He then gave it to the so-called “Good Reputation Index”, complaining that he had no idea how it was put together. He said Boral had received a 20-page questionnaire which would have taken an eternity to complete and that the interest groups surveyed would always rate Boral lowly as long as they were in the timber caper something they had no intention of exiting. Given the existing bias, the chairman said he wasn’t surprised at some of the lowly rankings.

It’s probably not worth describing at length Crazy Jack’s innumerable contributions, but here are some highlights from the Gospel According to Saint Jack:

– He repeatedly referred to the company as “Bloody Boring Boral Limited”. One heckler gave it back to CJ, saying “we think you’re bloody boring”. [Cue to loud applause.]

– After one shareholder had criticised Boral’s many critics, lavished praise on the company and implored the critics to look at all the good Boral was doing, CJ was up to the mike next. Chairman Moss quipped “are you going to praise the Directors as well, Jack?” Errrrr, not likely!

– CJ was into one of his patented rambling diatribes about the failures of Chairman Moss and Director (and Crikey favourite) Mark Rayner on the National Bank and (in the latter’s case) Pasminco boards. CJ asked “why haven’t you two been voted off the Board of Boral under the Westminster system of democracy which was adopted by this country under the Commonwealth of Australia Constitution Act of 1901, 05” Huh? What duck are you smoking, Jack?

– In another Crazy Jack rambling diatribe (that expression is fast becoming a tautology) against the re-election of director Elizabeth Alexander, he accused the incumbent of having no commitment to the company as she only held 1,745 shares. He was corrected by the (acting) Chairman Rod Halstead, who pointed out that the accounts clearly show her shareholding as 11,745.

– He pointed out that the Chairman took five weeks to respond to his first letter (of many, it was later revealed). He said this showed the Chairman’s inherent lack of communication, people and management skills. If I were a Boral shareholder, I’d say this shows a distinct lack of prioritisation and delegation skills on the part of the Chairman. Why the heck did he respond so quickly and why didn’t he just get a lacky to say “thank you for your concern but the Chairman is unable to address your most incisive comments, blah blah blah, 05”

– He later again alluded to “that brilliant letter, 05”

– CJ noted that “Moss and I have fallen out very badly” no shit, Sherlock! He said this was the first Boral chairman in 16 years that he didn’t get along with and this was all because “I am able to do an analysis of the results”. Yeah, right Jack, you really stuck it up them. Your incisive “analysis” was set out for all to see in the summary of results on page 3!

– When the time came for comments on an options package for MD Rod Pearse, CJ’s opening line was “like most people in this room, I don’t understand options and I don’t like them”!

– After an exchange with the Chairman, where Moss said “if you write to me in an abusive, offensive manner, I will not respond,” (applause), CJ said it would be a great Christmas present if Moss didn’t write to him again. Moss countered with “I’d have a better Christmas present if you never wrote to me again”!

One more Sideshow Jack anecdote before moving on.

In his celebrated “Westminster system of democracy” sermon, Crazy Jack referred to the Board’s “ethical standards” policy (“the Board must observe both the spirit and the letter of the law, 05high standards of business conduct, 05best practice” you know the drum).

In the same lecture, he referred to Moss and Rayner being associated with the NAB’s $3 billion Homeside writedown and the $3 billion losses of Pasminco that Rayner was associated with.

Without wanting to venture into the dangerous territory of trying to defend Crazy Jack, I think the point he was trying to get out which, incredibly, was lost in the translation was that Moss and Rayner are hardly “best practice” directors when they have been involved with these other corporate disasters.

Moss jumped all over CJ’s reference to the Board’s “Ethical Standards” policy and queried whether he was calling himself and Rayner “unethical”. CJ denied this and Moss gave it to him with both barrels and said that Crazy Jack was quick to imply they were unethical or dishonest but retreated when his bluff was called and “didn’t have the guts to come out and say it”. Big round of applause.

Moss then went on to defend his and Rayner’s record outside Boral and said that shareholders in the NAB and Pasminco had a right to ask questions at those companies’ AGMs and there was no reason to link the losses of the other companies with Boral. He then said that “you get the chance to vote on me in a few minutes” and “I reject the slur hanging over two of your Directors”.

Again, without wanting to be seen siding with a fruitloop, Moss did skirt around the question of the losses that he and Rayner were associated with. Tilburn went too far in implying unethical conduct on the part of Moss and Rayner, but the losses in other companies in which they have directorships must surely go to the question of competence?

Don’t Boral shareholders have a right to be concerned that two Directors of their company are involved with other companies that have racked up massive losses? Why wouldn’t they worry then that the same thing might happen to their company?

Once again, it was a moot point, because Moss and Alexander were returned with overwhelming majorities. (Alexander about 99.5%, Moss about 99.1%.)

The candidature of Christine Milne was the other interesting business of the day. Milne had a statement included in the notice to shareholders to the company’s credit it was included in full but with an equally lengthy rebuttal and a big don’t argue in bold: “The Board recommends shareholders vote for the re-election of Elizabeth Alexander and Ken Moss and confirms it does not support Christine Milne’s candidature for election.”

Unfortunately, those shareholders or Crikey operatives who wanted to put a few questions to Milne were not able to she was away on a Green pow-wow in Geneva and, like last year, could not attend the AGM where she was seeking election. Instead, we were treated to a five minute video present.

That really rankled this observer, who saw shareholders’ time and money pissed up against the wall by some shameless self-promoter with no chance of winning the Board seat and who couldn’t even be bothered fronting up to the AGM. Sound familiar?!

Crikey often criticises Boards for lack of air-time given to external candidates, but Boral really went over the top in accommodating this time-waster. An unedited spray in the Notice to Shareholders, a video presentation, and as many questions/comments from Boral Green Shareholders as they wanted. Boral could hardly be accused of stifling dissenting opinion.

Milne’s candidature statement was laughable if it wasn’t so earnest.

In pointing to her “intelligence”, she noted an honours degree in basket-weaving. I know I can expect a deluge of emails for this one, but an Arts degree (presumably from a Tasmanian tertiary institution) is, to quote my year nine Maths teacher Porky Pearce, “Mickey Mouse stuff”. When you are up against a bloke who has a doctorate in engineering and someone who has gone through the torture of the Institute of Chartered Accountants’ Professional Year program, I know who I would put the dunce cap on.

Her statement on her “financial” background beggars belief. “Having held the balance of power in the Tasmanian Parliament twice and having dealt with 9 State Budgets, 6 of which as the leader of the Green Party, I know that I can hold my own in any company’s board room.”

For starters, Boral’s sales revenue in 2001 was about 50% greater than the entire state of Tasmania’s expenditure in its 2000/2001 budget, so we’re not exactly dealing with entities of comparable size here. Secondly, how similar is the “business” of a state Government to that of a major diversified industrial like Boral? I’d say “not very bloody similar”! And what exactly does the leader of a minor party do in “dealing with” a Budget? How will that experience possibly give them any insight into how to run a major diversified industrial?

Milne’s only redeeming factor in her candidacy is her environmental credentials, but her views are skewed so far away from the other Directors that she would struggle to come close to getting majority Board support for anything she contributed.

Milne showed her commitment to the environment by placing A5 sized “how to vote” flyers on at least every second seat in the auditorium which added nothing to the statement in the Notice to Shareholders. But that’s ok, it was printed on recycled paper.

One proxy who identified himself as representing “Walden Asset Management” from the USA read out a long speech in Christine Milne’s favour when on no less than four occasions he referred to her as “Christina”. I didn’t once hear him correctly refer to her as “Christine”!

The Boral Greens would have realised that Milne’s Board aspirations were doomed as soon as Crazy Jack Tilburn gave a stirring speech in her favour and the doomsayers were right. Thankfully shareholders saw common sense and only about 2.8% voted in favour of Milne.

Although I’ve just dropped a bucket on Milne’s Board tilt, it was clear from the amount of time that the company dwelled on environmental issues that they are listening, so the Boral Green Shareholder message is getting through. Whether the environmental picture is as rosy as the company paints is another story. All it takes is one major stuff up and they’ll be firmly ensconced in the “environmental vandal” basket as far as everyone is concerned, not just the Greens.

Despite Crazy Jack’s objections, Pearse’s options package easily got through. In this regard, the company did something which I haven’t seen before they clearly set out the benefit that would go to Pearse when each performance hurdle was met, and what that would mean to shareholder wealth in terms of the increased market capitalisation of the company. When you viewed the increment in shareholder wealth against the value of the benefit received by Pearse, the grant of “700,000 options” didn’t seem that ludicrous. Again, the issue of executive remuneration was a sore point, but nobody could criticise Boral’s transparency. Crazy Jack may beg to differ.

This is the second year in a row Boral’s Directors have asked for the patience and understanding of their shareholders. While the company’s official line of “a sound result in difficult trading conditions” is probably a fair assessment, shareholders’ patience will be wearing thin. Boral’s financial results and share price performance have languished behind their former energy division, Origin Energy. And things won’t get any easier in the current climate, so come next shareholders might just be hearing about an unprecedented, prolonged down-turn.

Some other highlights in brief:

– Once again the question of lack of female representation was raised and once again the company implored that they were doing their best but of the top 400 executive positions only about 10% were women, ranking them no worse than most other Australian companies. They don’t like it, they’ve discussed it at Board level recently, surveyed staff and found that men think female representation is “about right” and women think their numbers in the top jobs could be higher.

– Did your humble correspondent from his front row vantage point spy Director Roland Williams dozing off on several occasions or was he just resting the eyelids for extended periods? He was kept awake via a steady supply of mints from Mark Rayner, but the 62 year old was doing nothing to rebut Crikey’s argument that the old boys should be put out to pasture.

– A Greenie who started his question with “I would remind the company to not forget that we are on Aboriginal land just food for thought” went on to ask why the company restricts its political donations to the major parties. Moss explained that the $150,000 was spread thinly between the States and the Commonwealth so Boral had to restrict themselves to throwing cash at those who they thought would be most effective in “assisting the political process”. Yeah, right!

– Was the company trying to send out a subliminal message by having a huge green backdrop curtain, a green Board table cloth, a green background to their slideshow and a forest of flora around the room?

One older shareholder picked up a split infinitive in the accounts Chairman Moss was disappointed as he hates a split infinitive. I must say I agree – it is.

Feedback to [email protected] or [email protected]

* Crikey has 1860 subscribers who for $55 get a tee-shirt, 5 sealed section emails a week with this sort of material and access to our 800,000 word searchable archive so why not join the Crikey army by clicking here to read the daily email updates with breaking news and analysis.

Peter Fray

Fetch your first 12 weeks for $12

Here at Crikey, we saw a mighty surge in subscribers throughout 2020. Your support has been nothing short of amazing — we couldn’t have got through this year like no other without you, our readers.

If you haven’t joined us yet, fetch your first 12 weeks for $12 and start 2021 with the journalism you need to navigate whatever lies ahead.

Peter Fray
Editor-in-chief of Crikey

JOIN NOW