The requirement that 100 signatures are necessary to produce a shareholder resolution in Australia has long been a ridiculous barrier to a proper culture of shareholder pressure. There literally hasn’t been a shareholder resolution at an Australian AGM for three years.
The 100 signature rule explains why I’ve run for 28 boards over the years and never managed to get a shareholder resolution up until this year’s News Corp AGM, courtesy of the Americans only requiring the proponent to own $US2000 worth of shares. Board tilts usually only require one shareholder signature, which is too easy, whereas standard shareholder resolutions are just too hard.
The 100 signature rule has made shareholder resolutions the exclusive province of green groups, unions and the Australian Shareholders Association, all of which have the resources to canvass widely, but only use the tactic sparingly.
Whilst US shareholders submit hundreds of resolutions every year, only a handful of Australian companies have ever faced a shareholder-sponsored resolution at an AGM.
However, according to The AFR this morning, the Transport Workers Union has submitted a cannily worded resolution about board protocols during takeover negotiations which, if accepted, will be voted on at the Qantas AGM on 14 November. If this gets up, the full list of companies that have copped AGM resolutions from groups amassing 100 signatures will be expanded to the following:
BHP: mid-1990s over Ok Tedi
James Hardie: mid-1990s over asbestos
Amcor: late 1990s
Boral: Green resolution in 1999 supported by 6.4%
Rio Tinto: Two union resolutions over labour standards and independent directors in 2000 got 17% and 20%
CBA: Wilderness Society on logging in 2002 (23% support)
NAB: Wilderness Society on logging in 2002 (21% support)
Boral: Green resolutions in 2003 (11.2%), plus six from TWU on board pay (4.3%) to safety targets (18.8%)
NAB: ASA resolution in 2004 calling for Geoff Tomlinson to be sacked which delivered 39.7% support
Bluescope Steel: Five AWU resolutions on pay and board issues in 2004 got 11-13%
CBA: Finance Sector Union resolution on restructuring in 2004 supported by 11.8%
Qantas: Transport Workers Union have submitted resolution for this year’s AGM
As you can see, 12 AGMs featuring shareholder resolutions in 15 years across a listed company sector which now numbers more than 2000 is hardly an endorsement of Australia’s shareholder culture or the current rules.
Well done to the TWU because, as News Ltd’s Terry McCrann has been persuasively arguing in recent columns, ASIC should indeed be investigating the Qantas board for not properly disclosing enough information to shareholders during the private equity tilt at the company that would have seriously enriched a hopelessly conflicted management team.
Stephen Mayne publishes the shareholder activism website www.maynereport.com