Great debate at the Orica AGM in 2000

And even the voting was pretty aggressive with the options package for executive directors only getting about 71 per cent of the vote in favour.

The best debate at AGMs in 2000 has been at companies whose shareholders have taken a bath - Pasminco, HIH, Delta Gold and now Orica are the ones that we've witnessed.

Orica chairman Ben Lochtenberg was very charitable to Crikey. Twice he told shareholders that he admired what we are trying to do and that "people like you are needed in Australia" to apply pressure so that directors "perform better".

The 44-year ICI veteran copped a lot of flak but never lost his cool. The Australian Shareholders' Association also did well. They got the necessary 100 signatures to be allowed to distribute a letter to shareholders with the notice of meeting which called for directors who have served for more than five years to be turfed out.

They did the same with Pacific Dunlop and it was a very effecitve campaign. In the case of Orica they attracted a whopping 5300 proxies from shareholders holding 7.8 million shares - this was 10 per cent of the total voted on the resolution approving the accounts. It also helps to drive ASA membership - which is up above 7000 - and drive traffic on their website which jumped 10-fold during the PacDun battle. This is exactly the sort of thing which needs to be done to raise the profile of shareholder pressure in Australia.

Institutional shareholders came in for a lot of flak for their subservient voting habits. Not a single insto spoke during the four hour meeting even though they've shared equally in the $1 billion bath that shareholders have taken since the ICI PLC selldown at about $12 a share in 1997. It's not struggling to hold $5.

I got up and rather indulegently told the meeting about my mixed feelings towards ICI Plc. They are fantastic because my 101 year old grandfather worked for them for 37 years until 1962 when he retired as a regional director and they told him he'd probably live for 5 years. 39 years later he's still on a generous indexed pension with them.

That's the upside, the downside is the way they've treated ICI Australia. Amid growing speculation that they would mop up the minorities, ICI Australia rode the chemical cycle which peaked around the time the parent sold out. There was no mention in the selling prospectus of all these clean up costs that have now bitten Orica on the bum at the Botany plant. There was another one-off $40 million abnormal cost this year because the EPA no longer allows Orica to incinerate the waste.

One shareholder and former Botany worker Peter Graham asked whether Huntsman (half owned by Packer) and Exxon Mobil would be sharing in the clean up cost having recently bought into parts of the Botany facility. Chairman Ben replied that they didn't take on any of the liabilities which is different from ICI Plc which niftily passed them onto all those unhappy punters who bought their stock for more than double what it's currently worth.

As if to rub salt into the wounds, ICI Australia spent almost $30 million rebranding themselves and then paid a way over the top $400 million for its former parent's global explosives business. Orica is now the biggest explosives company in the world and we haven't got many world leaders Down Under. But this expansion into all sorts of exotic places like Venezeula, Estonia, Kazakstan and Uzbeckistan has so far only succeeded in blowing up shareholder value.

ICI Plc spun off its successful pharmaceutical division into a company called Zeneca a few years back and grandpa is very satisfied with their performance whilst becoming more and more disillusioned with what has happened to ICI Plc. But good old Zeneca rubbed more salt into Aussie wounds yesterday when they terminated a distribution deal with Orica's crop care operations which generated about half of the division's profits. Chairman Ben said he was unaware of any more parental legacies that were left to come back and bite shareholders in the future. Let's hope that's the last we ever hear of ICI Plc and Zeneca.

The Orica board is very much a reflection of the Melbourne business establishment which has performed far worse than the Sydney business establishmnt over the years. There is former BHP finance types Geoff Heeley and Tony Larkin (now Orica CFO), along with ousted ANZ CEO Don Mercer, former Clayton Utz managing partner Catherine Walter and Biota chairman Brian Healey. The Denver-based global explosive boss Graham Liebelt sits on the board and the only other non-Melbourne director is former Tubemakers CEO Tony Daniels.

When prodded into finally speaking to shareholders Daniels rather disingenuously claimed he was not part of the Melbourne BHP club because he lived in Sydney and BHP slapped a hostile bid on the table just one month before he retired. Yes, but Tony, BHP already owned 50 per cent of Tubemakers and they appointed you to run that company. You were part of Club BHP.

The resolution to re-elect Daniels was defeated from the floor, mainly because of what Crikey told the meeting, backed up by ASA chairman Ted Rofe. I told shareholders that the only worse performing director in Australia is the PM's brother, Stan Howard.

Since Daniels joined the Pacific Dunlop and Pasminco boards, both have seen their share prices more than halve. Combine that with the current problems at Orica and you have a trifecta of dogs. On the credit side he has the Commonwealth Bank and AGL - one is part of an entire industry that has flourished and the other still makes plenty from its gas monopoly in NSW.

Daniels got home comfortably in the end with 88 per cent of the vote but this was lower than what Nick Whitlam got at NRMA and you should remember it is virtually unheard of for incumbent directors to get less than 90 per cent of the vote.

Orica is the best example I've seen to date of the problems caused by having the same cosy club of directors running the companies and also running the institutions that invest in these companies. Until April this year, Tony Daniels was chairman of the $30 billion NSW State Super fund. So he's the boss of one of Australia's biggest funds but at the same time he's destroying billions of dollars of money managed by funds such as his. But it gets worse because as a director of the Commonwealth Bank, he sits on top of Australia's biggest fund with $73 billion under management.

That's $100 billion covered by the Orica board, then you've got Catherine Walter who is a director of the NAB which is Australia's second biggest fund manager with $61 billion. Two of these funds, MLC Life and National Australia Funds Management actually appear in Orica's top 20 shareholders.

And then you've got Brian Healey being a director of the $25 billion Queensland Investment Corporation and a director of the $12 billion Portfolio Partners fund. So all of this dreadfully performing board sits on the boards of funds controlling $200 billion. Most of these people are also members of the Australian Institute of Company Directors, which is the directors' union and a very closed shop at that.

Chairman Ben said that the institutions were broadly supportive of the company's strategy and Catherine Walter told the meeting she had no influence over what individual fund managers do. Yes, but that's like Rupert Murdoch never telling his journalists to write positive stories him - they just do it anyway because they second guess what the boss wants. No self-respecting NAB fund manager is going to try and toss one of his or her directors off the board of another company.

All up it was an excellent meeting. The board are doing it tough in part through more bad luck than bad management, but the shareholders are rightly angry and the board were left in no doubt about their feelings.

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