The Australian’s business commentator Bryan Frith has produced an appallingly one-sided rave
this morning attacking the state attorneys-general for not supporting
the Commonwealth’s push to make it much harder for small shareholders
to requisition an extraordinary general meeting (EGM). Try this
exaggeration for size:

“The 100 member rule enables special-interest groups, such as
environmentalists and unionists, to hijack the agenda by calling
meetings to push their own barrow. There have been many victims of this
tactic, including North, over opposition to uranium mining at Jabiluka,
and Wesfarmers and Gunns, over opposition to logging old-growth forest

Many victims, Bryan? Try four EGMs at public companies since the law was introduced in 1988 and Bryan has mentioned them all.

In attacking the system that saw greenies call an EGM at Wesfarmers by
share splitting so that more than 100 of them held just one share each,
Bryan fails to point out that now you need a marketable parcel of
shares which is worth more than $500.

Bryan also erroneously describes those waging war at the NRMA as
“shareholders” when in fact they are members of a mutual. And he is
also wrong with this claim: “Without exception, such requisitions were
overwhelmingly defeated.”

There was only one EGM successfully called by the shareholders of the
NRMA public insurance company and the proposed resolution to ban
payouts to directors was supported by 45.8% of shares voted, partly
because ASIC had charged former chairman Nick Whitlam a few weeks

I’ve got no problem with making it harder to call EGMs but there needs
to be a quid pro quo. Bryan alludes to this when he wrote: “The
government proposed to retain the ability of 100 shareholders to add a
resolution to the agenda of an annual general meeting.”

Gee, what a nice a concession by the government. There have only been
24 occasions since 1988 when 100 shareholder signatures have been
successfully gathered and this has been the exclusive province of big
unions, big green groups, the Australian Shareholders Association and
the NRMA ginger groups.

The USA has a system where anyone with $US2000 worth of shares can get
a resolution up. This means they have hundreds of resolutions a year
and a genuine culture of shareholder pressure. I would far rather push
resolutions than run for boards, but it is just too hard to gather the
100 signatures.

The next time a director of a public company would like to put an issue
on the agenda at a board meeting, how would they feel if this could
only happen if 100 shareholders signed the same piece of paper? It
literally takes days and the state attorneys should hold out until the
Federal Government proposes dropping this ridiculous barrier because it
does not cost anything to add an extra resolution to the agenda at an
AGM that will be taking place anyway.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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