Having not run for a public company board since the embarrassment of
only getting a pathetic 11.41% at the AMP AGM in May 2003 after almost $10 billion had been lost in the UK, it will be very
interesting to see how the three tilts in the forthcoming AGM season
Gunns, John Fairfax and Macquarie Infrastructure Group are today
formally placed on notice about the outrageous election rorting that
Crikey has been subjected to during the previous 19 tilts and we look
forward to them running free and fair elections this time.
The biggest rort is declaring there is no vacancy on the board when the
company’s constitution usually allows for between 3 and 15 directors
and your average board has nine. Given that most incumbent directors
get 99%, the effect of declaring there is a no vacancy makes it
statistically impossible to get elected because you have to knock off
an incumbent to win. NAB, Fairfax, AMP, ASX, Westfield, CBA, WA News,
NRMA and David Jones all pulled this
stunt against Crikey.
The second most outrageous rort ties in with the first and it involves
a chairman using undirected proxies against the outside candidate,
which typically run to about 6% of all votes cast at a corporate AGM.
You can’t beat an incumbent with 99% when you know the chairman has 6%
in his back pocket before the AGM even starts. The only board which
clearly declined to use open proxies against Crikey was
National Australia Bank in 2000.
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This block of votes is gathered by having a postal voting system where
reply paid envelopes are sent out with the ballot paper and any
shareholder who simply signs the form but doesn’t cast a vote on a
resolution, is handing their vote to the chairman. There’s no box to tick asking whether you want to do this, it is the
default mechanism. This would be the equivalent of a government being
able to use all blank ballot papers to vote for themselves, just
because the voter happened to turn up at the polling booth and drop the
ballot paper in the box.
The third major rort comes from censoring your platform which is
distributed to shareholders in the notice of meeting. The worst
offender in this regard was News Corporation which allowed no
information at all, but others such as Westfield, NRMA, CBA,
Woolworths, David Jones and Spotless were blatant censors. Makes it a
bit hard to win votes when you can’t tell shareholders why you are
running for the board.
The fourth most popular rort, which ties in with the third, is refusing to supply a copy of their
share register or attempting to charge a ridiculous fee to provide a
list of the top 200 shareholders when the board has this sort of
information all the time.
Only AMP has ever every provided a free list of the top 200 shareholders,
removing all the confusing nominee companies to reveal beneficial
ownership. The ASX itself were good enough to provide a top 100 in 2001, but
apart from that, companies have been very reluctant to provide the
information that is par for the course in political elections.
Does anyone else think it’s time for the Australian Electoral
Commission to take over corporate elections? We’ll see whether any
progress has been made over the coming few weeks.