We were all in
agreement at yesterday’s Chartered Secretaries Association “Is the AGM dead?” governance symposium
in Melbourne that the annual gathering of shareholders is in a pretty sick way with falling attendances and woeful debate.
True, a booming share
market has mitigated much of the normal heat but some big companies are
worried that unions are about to redouble their focus on AGMs because
of their reduced power under John Howard’s new IR laws.
Unions will just fill the gap from vacating retail shareholders fed
up with the Jack Tilburns of the world but if shareholder participation
is really what companies want there is one simple
reform that would dramatically improve AGMs: introduce the US
requirement that a shareholder can get a resolution on
the notice paper with just $2,000 worth of shares.
The main reason that I run for boards is that it is just too hard to
gather the 100 shareholder signatures necessary to get a resolution on
the notice paper. History shows that only green groups, unions, the various factions of the NRMA and the
Australian Shareholders’ Association have been able to gather them.
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Whilst the Americans deal with hundreds of resolutions from individual
shareholders each year, this has seemingly never happened in Australia.
Here’s a list of the 24 occasions that 100 signatures have been
gathered. The majority were for EGMs or resolutions but the s249p
statements favoured by the ASA are just a spiel that gets distributed
to shareholders with no accompanying resolution to vote on.
BHP: mid-1990s over Ok Tedi
James Hardie: mid-1990s over asbestos
Amcor: late 1990s
over green issues
Wesfarmers: 1999 EGM called by greenies who mostly held just one share and got 2% support for their eight resolutions
North Ltd: Wilderness Society EGM with three resolutions supported by just 3-5% of shares voted
Boral: Green resolution in 1999 supported by 6.4% of the vote
Rio Tinto: Two union resolutions over international labour standards and independent directors in 2000 got 17% and 20% respectively
Pacific Dunlop: ASA s249p statement on poor performance in 2000
IAG: EGM with resolution proposing shareholders approve director payouts. Supported by 45.8% as Whitlam was on the nose
Lend Lease: ASA s249p statement on poor performance in 2001
Orica: ASA s249p statement in 2001 calling for board cull
after poor performance
Telstra: ASA s249p statement in 2001 on falling share price
CBA: Wilderness Society on old growth logging in 2002 (23% support)
NAB: Wilderness Society on old growth logging in 2002 (21% support)
David Jones: ASA s249p statement in 2002
on poor performance
Coles Myer: ASA s249p statement in 2002 which added to the clutter around the Solly Lew eviction
Gunns: Wilderness Society resolution at EGM supported by just 0.4% of shares voted
Boral: Green resolutions in 2003 (11.2%),
plus six TWU resolutions ranging from board pay (4.3%) to safety
ANZ: Union rep Joy Buckland had s249p statement from FSU supporting her board tilt in 2003 but got just 5.1%
Foster’s: s249p statement from ASA in 2003 on three bad years
NAB: ASA resolution in 2004 calling for Geoff Tomlinson to be sacked with s249p statement in support that delivered 39.7% support
Bluescope: Five Australian Workers Union resolutions on pay and board issues in 2004 were not supported by a statement and got 11-13%
CBA: Finance Sector Union resolution on restructuring in 2004 supported by s249p statement which delivered only 11.8% support
Paperlinx: ASA s249p statement on poor performance at 2005 AGM