On 364 days a year, the Australian Shareholders’ Association is
dedicated to holding Australia’s top 150 companies to account and, if
necessary, grilling boards at annual general meetings. However, the
tables were turned yesterday when the ASA board fronted its own AGM in
Melbourne and we had a solid 90-minute debate about its performance,
policies and financials.

Stagnant membership numbers of just over 7,000 for the past five years
is now the subject of special board meetings – how can the ASA boost
its numbers, generate extra revenue and become a more effective
advocate for shareholders? After several members offered up
suggestions, I got up and gave an explanation of the Crikey model,
which would substantially boost the ASA.

Firstly, get rid of a password protected member only website.
As one member correctly pointed out, how can the ASA maximise proxy
solicitation if non-members are locked out? Throw it open to everyone
as a window for prospective members to sample what is on offer if they
pay up just $95 a year.

Secondly, cut the costly printed magazine Equity down from
to four editions a year and introduce regular email updates whenever
you’ve got something to say. Despite its elderly 55-plus demographic,
60% of ASA members are on email and this is growing every year.

Next, stop having private pre-AGM exchanges with companies because it
telegraphs the punches and reduces the ASA’s presence at the actual
public meetings, which in turn means they generate fewer media mentions
– a vital ingredient for growing the membership base.

I’ve lost count of the number of times an ASA representative opens up
by saying: “good morning chairman, congratulations on the wonderful
performance, thank you for answering my 12 written questions and
inviting us in for a cup of tea last week, now can you please just
clarify this one point.”

Towards the end of yesterday’s exchanges with the rather defensive ASA
chairman Stephen Matthews, I pointed out that the very debate we were
having – unscripted, no forewarning and bouncing off what other members
were saying – was exactly how the ASA should approach the top 150
companies. The argument that chairs might not be able to produce an
answer is wrong, because the full board and management team is usually
present to assist.

Finally, just because profits and dividends are up, doesn’t mean there
aren’t still interesting questions to be asked and – heaven forbid –
occasionally they should even stray into non-financial areas, such as
problem gambling at an outfit like pokies giant Aristocrat Leisure.

My approach is to underwrite the debate at an AGM. You start out
perfectly happy to say nothing, but if no-one else is contributing then
you keep hammering away up to a maximum of two hours, provided the
audience is with you. The ASA should do the same because there is no
point attending an AGM of a booming company and saying nothing.

When it came to the re-election of Matthews a deal was proposed – if
the ASA ended its record of recommending against all 22 of my public
company board tilts over the past six years when a tilt at Macquarie
Bank materialises in July, Matthews would have my vote. It was a joke,
of course, with a bit of a kicker about the ASA’s reluctance to endorse

The only other points I raised were a request for the age and
backgrounds of directors to be published in the annual report and a
criticism of the ASA for supporting the 100 signature requirement for
shareholder resolutions. The government came up with a proposal to
reduce this to 20 signatures – something Matthews wrongly suggested I
was responsible for – but then backed off when companies complained and
the ASA inexplicably advocated no change.

If owning $US2000 worth of stock is good enough for a shareholder
resolution in the US, surely 20 signatures would suffice here and help
us develop a greater culture of shareholder pressure. All this paranoia
about special interest groups taking over is rubbish when you consider
that 100 signatures have only been successfully gathered 24 times over
the past 15 years across the entire 1,600-plus companies listed on the

The ASA does a solid job, but it could do better. A tilt at the board
in 2007 is not entirely out of the question if performance doesn’t
improve, although there would be some conflicts of interest to work
through, plus potential constraints on AGM activity whilst inside their

Peter Fray

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Peter Fray
Editor-in-chief of Crikey

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