The AWB EGM on constitutional reform in Melbourne yesterday was an extraordinary affair, producing some dramatic debate, the closest contested vote ever seen at an Australian public company and then the contentious decision to adjourn one of the meetings and extend voting until September 3.
Whilst regular B class shareholders were always going to strongly support ending the farmer gerrymander over the AWB board, getting 75% support from A class grower shareholders was a tougher ask, especially when four farmer directors campaigned against the move.
These four recalcitrants copped an awful shellacking at the meeting and proved to be inarticulate advocates supported by a tiny minority of looney supporters from the floor. As a debating exercise it was all one traffic and the recalcitrants were clearly spooked about getting sued, which almost certainly will happen if the reform program fails and they remain as directors breaching their fiduciary duties to act in the best interests of the company as a whole.
The scale of grower protection that former National Party leader and farmer John Anderson built into the AWB constitution was designed to withstand all manner of assaults and thus far it still survives even after the scandal of those $300 million in bribes to Saddam Hussein, the Cole Royal Commission and the recent abolition of the single desk in a Parliamentary vote by 110 votes to 5.
Sadly, agrarian socialism, hairbrained nostalgia and misty eyed agri-politics remains alive and well on some farms if the pathetic contributions from growers such as Jock Munro and Bob Iffla are any guide.
AWB chairman and Queensland grain grower Brendan Stewart is a seasoned warrior who at first led the defence of AWB both at the Cole Royal Commission and in the face of attacks on the single desk.
However, the arrival of new managing director Gordon Davis from Orica two years ago signalled a sea-change at management level and he insisted on constitutional reform to deliver a commercial board that would support his drive for cultural and financial change.
The bolshie A-type personality blokes who used to populate AWB’s management ranks and so covered themselves in glory at the Royal Commission are now all out the door with several facing charges. The single desk is dead and the final piece in the puzzle is removing the gerrymander which sees farmers control nine of the 12 board seats plus the chairmanship.
Stewart’s speech yesterday was one of the most inspiring you’ll ever hear at an AGM as he combatively dispatched all the hair-brained opposition arguments one by one. Have a read here.
However, the board’s decision to accept a Victorian Farmers Federation proposal to adjourn the A class meeting and effectively extend voting was certainly controversial.
At one level it was changing the goal posts. The proxies suggested that 74.7% of farmer shares supported the change, which fell fractionally short of the super majority required. However, given the turnout was only 27% and the support for change was so overwhelming, another two weeks of voting is justified in the circumstances.
AWB was clearly aware it was a contentious step by the tone of its press release yesterday and the recalcitrants are already bleating with the lamentable Bob Iffla quoted in The AFR comparing the situation with Zimbabwe.
Whilst at one level, the extension was the equivalent of Jeff Kennett extending voting by two weeks after falling agonisingly short in the 1999 Victorian election, corporate voting in Australia follows the strange path of having the equivalent of the televised leaders debate after 99% of the votes have been cast before the proxy deadline.
This extension means that all voters can now digest the arguments from yesterday’s meeting and make a more fully informed decision.
Based on what we heard yesterday, the reform option really is a no-brainer but the “no” case should at least be given full access to the share register to canvass, plus an ability to appoint scrutineers to look over the shoulder of Computershare as it counts the votes that flow in after this final frenetic round of arm-twisting.
*Go to www.maynereport.com for some audio and video action from yesterday’s extraordinary AWB EGM.