The battle for West Australian Newspapers was Australia’s first US-style proxy battle for control of a major company board.
While that issue remains unresolved heading into this year’s AGM, with Kerry Stokes’ Seven Network still sitting there as the largest shareholder with no board representation, a second dramatic board proxy battle has now emerged.
The board of former monopoly wheat marketer AWB Ltd has dramatically split; four troglodyte grower representatives have signed a letter opposing constitutional reform even after the Liberals and the Rudd Government recently combined to smash the single desk in Parliament.
The documents for the EGM on August 21 have all been released this morning and these clowns really do deserve to be sued. Have they no shame after the disgrace that was the single desk and those $300 million in bribes to Saddam Hussein?
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The AWB realists, led by Queensland grower chairman Brendan Stewart, had a pre-emptive crack at reform that was narrowly defeated at the AGM in February because they feared the Cold War warriors would seize control in the farmer elections and then install a troglodyte as chairman.
While Stewart should be condemned for his role as a director right through the bribes scandal, he has seen the light on corporate governance and championed the push for constitutional reform that will see him and all other grower directors booted from the board.
Former National Party leader John Anderson drove the privatisation of AWB in the late 1990s which included unique poison pills that were an affront to corporate governance. He should come out now and condemn the structure which sees AWB banned from takeovers and growers guaranteed 7 of the 11 board seats and the chair, regardless of who actually owns the company.
No wonder the former $2 billion company is now only worth $840 million. That’s called a huge “governance discount”.
Adele Ferguson has delivered a well-briefed broadside at the gang of four in The Australian today, pointing out that all the governance houses and institutional shareholders are lining up behind reform, which requires support from 75% of the grower shareholders to pass.
Ferguson hints strongly that the four — Colin Nicholl from Western Australia, Russell McKenzie from Victoria, Rodger Schirmer from NSW, along with Xavier Martin from NSW — could face legal action if reform fails because they are not acting in the best interests of the company.
The four may be currently covered by AWB’s directors and officers insurance, but you can bet your bottom dollar that this is being reviewed by the insurer right now, particularly in the current environment of heightened liability paranoia and litigation.
The single desk is dead, killed off by more than 90% of the politicians in Federal Parliament. About 50 of Australia’s 23,000 grain growers managed a couple of noisy protests in Canberra with Parliament House; now we are seeing one final act of defiance.
If reform is defeated, I hope these directors get sued, lose their farms and go bankrupt as they are nothing short of a disgrace.
Check out this multi-media package on The Mayne Report after the dramatic 2008 AWB AGM in February.