Crikey readers may
have been surprised to read that the Australian Shareholders
Association voted its 350,000 proxies against Stephen Mayne’s board
tilt at Macquarie Bank (Crikey, 22/07). Mayne was running on the fairly
reasonable platform that Macquarie directors
and management should not be allowed to participate in floats conducted by the
bank, in accordance with US

The ASA website claims that

has been
successful in raising the standard of corporate governance in Australian
companies. The Association continues to press for improvements in transparency
and accountability in relation to company performance, executive remuneration,
treatment of minority shareholders, risk management and dividend

One would have thought that ceasing
the nefarious practice of divvying out free shares to a favoured few directors
and management would fall squarely within the ASA’s aims of improving
accountability in performance, remuneration and treatment of shareholders. While
ASA Chairman, Stephen Matthews, publicly criticised
Macquarie over what
he dubbed “excessive” remuneration, perhaps he should have put his proxies where
his mouth is and voted in support of Mayne.

This isn’t the first instance that
the ASA hasn’t gotten it quite right recently. In March, the ASA weighed into
the debate regarding investment banker fees, particularly the $20 million fee
that Coles Myer paid to Carnegie Wylie to advise it on the sale of its Myer
division. When questioned about the excessive nature of the fee, ASA chief
executive, Stuart Wilson, was quoted as saying that the fees paid by Coles Myer
were not material in terms of earnings but companies should spell out fee
structures to stop conjecture about the cost.
Wilson must have
missed his accounting class on materiality. The $20 million fee was more than
half of the $38 million that Myer earned the previous year. This doesn’t exactly
sit well with the ASA Annual Report which claims the associations main aims are
“protecting and advancing the interests of investors in

The ASA does a great deal of
fantastic work which is honestly motivated and in the best interests of small
shareholders. However, it should be remembered that the ASA is not a small
organisation. It raised more than $950,000 and spent a not inconsiderable
$829,000 on “suppliers and employees”. However, despite its hefty budget, the ASA seems to be having little if any real effect
on how companies are being run, apart
from the odd media grab.

It is a little surprising therefore that when
someone like Stephen
Mayne tries to make a real difference
about corporate governance, the ASA votes its proxies against him.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey