There was one major triumph for Crikey at the John Fairfax AGM in Sydney last week that we didn’t mention in Friday’s edition and has only been referred to in passing by The Australian’sMargin Call columnist Michael West.

Whilst 7.85% on the proxies was disappointing, for the first time in any contested corporate
election, I received a clear majority of the vote in the show of hands
on the floor of the meeting. This was after the four candidates all
gave their speeches and my five minutes in the dark without a microphone focused on four key points:

  • Ron Walker is utterly inappropriate as chairman given his Liberal Party and Packer connections
  • Unlike the rest of the board, I have direct newspaper experience and have made money out of internet journalism
  • The board have rorted the election through the old “no vacancy” trick which makes it statistically impossible to get elected
  • Send a message on these three points, safe in the knowledge that I won’t be elected

Most boards want to avoid the potential PR embarrassment of a show
of hands, so they instead go straight to a poll. Rupert Murdoch taught
everyone about the dangers of this in 2002 when he completely censored
my platform and then left open the door for a protest on the floor of
the meeting which he duly got in a line-ball vote.

Ron Walker has now done it again, but Fairfax has also been very
sneaky. On seeing the clear majority from the floor against the board’s
advice, chairman Ron didn’t declare the resolution passed but instead
simply declared that a poll would be held. At this point I said this was not necessary because the proxies were so clear cut and
offered to withdraw “provided it is noted that I received a majority
from the floor of the meeting who had listed to the debate.”

Fairfax agreed but then broke their word as this is how they explained
why the poll was “withdrawn” in their ASX announcement on Friday: “A
poll was called on this resolution. After the calling of the poll, but
before
voting, My Mayne announced to the meeting that he did not wish to
proceed with the poll as the outcome was clear.”

When on earth is the AEC or some other independent body going to get
involved in corporate elections because the rorting is just
extraordinary? Former Hawke Government Minister Chris Schacht pointed
out that the Fairfax ballot paper would be turfed out straight away in
any
political election, because it said the incumbents were being
“re-elected,” while I was only being “elected.”

However, the far bigger rort was the “no vacancy” trick, because
even with 100% of
the directed proxies in favour, I still would have lost once Ron Walker used
the open proxies. The three incumbent directors received more than 606 million proxies in favour and between 1.18
million and 4.5 million votes against, but chairman Ron had 5.8 million
undirected proxies waiting in reserve to use against me. Had I got all
600 million directed proxies in favour, Ron would have declared a poll,
cast the open proxies against me and concluded that my 99.05% was not
good enough because the three incumbents had all got more than this.

The fact that Fairfax only has 7 directors when its constitution
allows
for up to 12 completes the circles of what is clearly a disgraceful
situation. There were 5 vacancies for new directors yet ASIC, the ASX
and the Federal law tolerates the situation I’ve just outlined where a
challenger can literally get 100% of the directed proxies and still
lose.

As we’ve said countless times before, if the owners of a company want
to inject a new director onto the board, who are the incumbents to
declare there is no vacancy when the total number will remain below the
upper limit prescribed in the company’s constitution?