you read this, Macquarie Bank chairman David Clarke and his fellow
directors will know the exact proxy position for the first ever
contested Millionaire Factory board election at this Thursday’s AGM –
but he certainly won’t be letting on to me. This imbalance of
information is just one of the many rorts tolerated by ASIC, the ASX
and the Corporations Law in Australian corporate elections.

was hoping to write to all Macquarie Bank shareholders as part of the
tilt, but the board decided they would charge $3600 for the privilege
of receiving an electronic version of their share register, something
which is standard in political elections but has never happened in my
24 board tilts over the past six years.

In the last three tilts – AMP in 2003 and Fairfax and Gunns last year –
the boards were good enough to provide a copy of the largest 200
beneficial shareholders. This was progress but the Millionaire Factory
haven’t even come good with that.

bank has also conceded that the positions on the voting paper were not
determined by ballot, which explains why I’m last of the three

This might come as a surprise to the political
junkies who read Crikey but I spent a couple of hours last night
crunching the numbers and concluded that 100% of the directed proxies
would not have been good enough to win a seat in more than half of my
previous 23 tilts. This is because of the “no vacancy” rort when boards
declare there isn’t a position for the challenger, meaning you have to
knock off an incumbent, who typically get re-elected with 99% of the
proxies in their favour.

The reason that 100% is not enough to win is because an average of
almost 10% of proxies have been given by default to the chairman as
discretionary votes by those dopey shareholders who just sign the form
and send it back in the reply-paid envelope when all the boxes aren’t
ticked. Imagine if incumbent governments could assume every box not
ticked was a vote against a challenger.

Macquarie haven’t done the “no vacancy” rort like in 18 of the other
tilts, but they certainly haven’t run a fair election and I’ll be lucky
to get into double figures, even though the platform to ban staff from
taking up shares in Macquarie floats and placements is very strong. Is
it too much to ask that Australia’s largest capital raiser stop a
practice which is illegal in the world’s largest capital market, the

A full list of the previous 23 tilts with all the details of open
proxies held by the chairman, incumbent votes and the old “no vacancy”
rort can be found here.

This is unique research and well worth a read because Australian
corporate elections are a complete joke and it really is time that the
Australian Electoral Commission stepped in. If councils and unions
can’t be trusted to run fair elections, why should companies? The
evidence of abuse is now there for the world to see.

Don’t expect the Murdoch press to run with this story because News Corp
has been the worst offender, rejecting nominations on questionable
grounds and then completely censoring the platform in the one year out
of four that my nomination was accepted.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey