After buying Melbourne-based Proxy Australia in June, the world’s
biggest proxy advisory firm, Institutional Shareholders Services, is
cranking up the PR as it flexes its muscles like never before during
the current Australian AGM season.

Visiting global ISS CEO John Connolly gave interviews to all the papers yesterday as you can see from the coverage in The Australian and the Herald Sun. Crikey didn’t get offered an interview and there is one obvious
question it would have been nice to ask: how on earth can ISS claim
that News Corp has a majority of independent directors?

I only belatedly listened
to the News Corp AGM again last night and full marks to Rupert for
leaving the full exchange online. During the debate about independent
directors, News Corp’s group general counsel Lawrence Jacobs piped up
that ISS rates News Corp as having a majority of independents and this largely took the wind out of my sails.

Of course, this is a complete fiction yet somehow both the New York Stock Exchange
and ISS have allowed Rupert to get away with claiming that someone like
Ken Cowley, who has been on the payroll since they launched The Australian together in 1964, is an independent director.

I haven’t seen the ISS report making the claim but in Crikey’s view
this is a black mark against ISS, although it does appear to be kicking a few
goals during the current AGM season in Australia.

It is fair to say that not all companies are enjoying being told what
to do by the likes of ISS and the cowboys appear to be concentrated in
Perth. Consolidated Minerals CEO Michael Kiernan spat the dummy and
resigned after his incentive scheme was withdrawn ahead of imminent
defeat and Jubilee Mines executive chairman Kerry Harmanis launched an almighty spray at governance do-gooders during yesterday’s AGM.

Check out both his address and the proxy votes here.
Sadly, the media largely ignored the proxies which showed a substantial
protest against the remuneration report, incentive scheme and options
issue to a director. In fact, all three resolutions were in the balance
due to a large
number of open proxies, yet the Jubilee cowboys declared they all
passed on a show of hands when a poll should have been called. No
wonder Jubilee Mines shares tanked another 19c to a five-month low of
$6.11 this morning. The governance is appalling.

ASIC was right to clamp down on pharmaceutical research company Novogen for doing exactly the same
thing, although its remuneration report was actually defeated on the proxies.
ASIC issued this press release yesterday after forcing Novogen to write
to shareholders and correct the record and apologise for not going to a
poll. I was particularly interested by this ASIC concern:

Novogen issued a release to the market that was potentially misleading to
shareholders in that it presented the ‘no vote’ as a proportion of the whole
issued share capital, rather than as a proportion of the number of votes
reflected in proxy forms lodged prior to the meeting. This had the effect of
reducing the apparent ‘no vote’ from approximately 70 per cent (of directions in
proxy forms lodged) to 12.5 per cent, creating an entirely different perception
of the level of disapproval of the remuneration report.

That’s exactly what Rupert did in New York when I asked him to spell
out the actual votes – he declared that only 5.5% of the shares opposed
the directors, when it was about 15% of the actual shares voted.