Dear Mayne Report subscribers,

We've got six interesting stories in today's edition of the Mayne Report, including an insight into next week's controversial AWB AGM, some stats on AGM voting trends, a new section for directors, a piece on foreign ownership of our resources sector, some more on political donations and 12 news names for our Rich List.

And if you're in Sydney, tune in to ABC 702 at 9.15am this morning for the fortnightly chat with Deborah Cameron.

Enjoy and do ya best, Stephen Mayne

The AWB AGM is on next Tuesday and it should be a cracker with the board boldly proposing huge and necessary constitutional reform that will probably get knocked off by the 18,000 grain grower shareholders who are being asked to relinquish control.

I co-hosted from 4-6pm with Lindy Burns on 774 ABC Melbourne last night as part of a special outside broadcast from what passes for an ASX headquarters in Melbourne these days ahead of the big interest rate announcement at 2.30pm this afternoon. AWB managing director Gordon Davies, a cleanskin recruited from Orica to clean up the mess after the $300 million Saddam bribery scandal, dropped by for an interesting interview which you can listen to here.

Gordon has his work cut out because he needs 75% of farmers - many of whom are Cold War warriors still fighting yesterday's battle to retain the single desk - to approve the move to a more conventional board rather than the current circus which mandates that seven of the 11 directors have to be grain growers.

This ridiculous structure was put together by former National Party leader John Anderson but the Iraqi bribes scandal, Cole commission and change of government have all conspired to strip AWB of its single desk monopoly.

The share price is hovering at a record low near $2 as the market frets that bone-headed farmers will knock off constitutional reform and then the Government will come down even harder with its new laws on wheat marketing after June 30.

It's an interesting situation because the constitutional reform would immediately sweep all the farmers off the board. Three of the seven are retiring anyway, but if another three anti-reform challengers get up, then the fragile consensus which led to next week's proposal could be lost.

While we're seeing unlikely Liberals such as Shane Stone and Bill Heffernan come out in support of saying "sorry" over the Stolen Generation, it really is time that the likes of John Anderson and Tim Fischer publicly endorsed change at next week's AWB AGM. Having created the messy structure, they owe it the company to help fix it up and that means arm-twisting farmers to surrender board control.

Finally, check out this account of last year's AWB AGM in Crikey. We'll be telling Mayne Report subscribers first and fast about all the developments next Tuesday afternoon in a special edition.

Risk Metrics, one of the two corporate governance advisory firms in the Australian market, yesterday put out this press release trumpeting increased against voting at public company AGMs in 2007.

Whilst only 4.8% of all resolutions put by ASX100 companies are formally classified as "controversial" for breaching the ASX Corporate Governance Council's revised Principles and Recommendations, these resolutions attracted average against votes of 28% in 2007, up from 24.6% in 2006.

It seems that less big companies are running the corporate governance gauntlet by putting up controversial resolutions. When they do, they are increasingly likely to follow Telstra's lead on its remuneration report and get knocked off, because the big institutional investors are now keenly following the advice of the all-powerful proxy advisers like Risk Metrics (formerly ISS) and CGI-Glass Lewis.

However, it seems standards are deteriorating in the middle of the market, especially following the avalanche of new floats by Perth-based companies in the resources sector.

Perth is clearly suffering from a deficit of governance-conscious independent directors because Risk Metrics claims that amongst companies ranked 201 to 300, a whopping 24.6% of all resolutions put to shareholders in 2007 were classified "controversial", up from just 15.1% in 2006.

This is where our fledgling little corporate governance ezine needs to step up. The media largely focuses on the big end of town where standards are rising amid greater scrutiny. Standards are clearly in decline once the market caps get below $1 billion, so it's time for a bit of name and shame in that space.

The Mayne Report is primarily about driving better corporate governance but the one issue where politics directly enters the fray is on February 1 each year, when the annual deluge of donations figures are released to the nation.

There's an old saying that "a fish rots from the head", so if we don't get our political disclosures and transparency right, then it will be that much harder to drive reform in the corporate sector.

Unfortunately, it was another disappointing effort by the media to create some public debate around the whole grubby system of political donations in Australia.

I emailed about 50 journalists in the early hours of Friday morning alerting them to the imminent deluge of figures in the hope that it would generate some more coverage than last year. It helped a little but there was still nowhere near enough scrutiny.

Here are the audio files of our radio discussions about the political donations figures for 2006-07.



ABC PM program with Mark Colvin - click here.

774 ABC Melbourne with Jon Faine - click here.

5AA with Nick Xenophon - click here.

The Chinese Government's raid on Rio Tinto has prompted us to update our sadly large list of 30 majority foreign-owned resource projects in Australia. We suspect there will end up being more than 50 entries given Australias' woeful record in developing and owning resource projects.

Whilst the Brits were a bit sour about losing Hong Kong in 1997, didn't you love the terse statement from Rio Tinto chairman Paul Skinner yesterday: "This unexpected development, of which we had no prior notice, reinforces our view of the long term value of Rio Tinto."

The snobby Rio board has refused to even talk to BHP, so imagine the cold shoulder that the Chinese will get.

I'm having a chat to Today Tonight this morning about China's raids on the Australian resources sector. Strangely, no one else seems to be running the line that this should be a two-way street.

And didn't you love this line from Chinalco President Xiao Yaqing at his Sydney press conference yesterday: "No government would want to see monopolies happen.''

Unless, of course, that monopoly happened to be the Chinese Communist Party's iron-firsted control over public life in the world's most populous country.

Strangely, this is not a line being pushed by the Murdoch press, which is still yet to report on the extraordinary tale of News Corp's Chinese adventures revealed in Bruce Dover's new book which was discussed in this item in Crikey yesterday.

Finally, here's a list of the major Chinese Government resources investments in Australia:

Chinalco spent $15.5 billion for 9% of Rio Tinto
CITIC spent $113m last July lifting stake in Macarthur Coal stake from 11.6% to 19.9%
Shougang Corp last week spent $400 million buying 20% of WA iron ore company Mt Gibson Iron
Sinosteel spent $100 million for 10% of WA iron ore hopeful Midwest Corp two weeks ago.
CITIC paid more than $400 for its 22.5% stake in the Portland Alumium Smelter in the 1990s

Three of these five substantial investments have happened in the past fortnight as the Chinese take advantage of the American-inspired global credit crunch to try and secure some strategic iron ore investments at reasonable prices.

Today we're unveiling a new directors section on the website which we hope will really help drive accountability and deepen the gene pool in the director's club. Weeding out bad directors is the last frontier for Australian corporate governance and we hope to supply useful information to that end, plus highlight those that are doing a good job.

For instance, the practice of CEOs having one outside board seat is reducing but there are still some out there as the following list demonstrates:

CEOs with board seats elsewhere

Geoff Dixon: the Qantas CEO is a director of Consolidated Media Holdings
Andrew Forrest: the Fortescue Metals CEO is also chairman of Poseidon Nickel
Wal King: the Leighton CEO is a director of Coca-Cola Amatil
John Marlay: the Alumina CEO is a director of Incitec-Pivot
Dick McIlwain: the Tattersall's CEO is chairman of Wotif and Supercheap Auto.
Michael Tilley: the Challenger Financial Services CEO is a director of Orica
Sol Trujillo: the Telstra CEO was allowed to keep one of his US board seats at retailer Target

There's plenty more interesting reading in the Directors Section. In Thursday's edition we laid out the longest serving executive directors and in last Wednesday's edition it was the oldest directors.

There is also this story about the 14 blokes who chair two top 150 companies, giving them a ridiculous workload that breaches the ASX corporate governance guidelines.

Going back a bit further, there was this list of conflicted service providers - a practice whereby directors also offer accounting, legal or investment banking services. This is rarely seen these days, although no-one explained that to Mark Burrows as he extracted advisory fees from Fairfax and its rivals whilst serving as deputy chairman. His departure is good news all round.

Max Fremder: a co-founder of chemical giant Nufarm, Max has made plenty from his 15% stake in Select Harvests which is pushing to become the world's largest almond grower. He is chairman and owns 5.77 million shares worth about $40 million.

Chris Wilks: The finance director of Sonic Healthcare owns 500,000 shares.

Doug and Chris Daws: the father and son team that were behind what is now called Poseidon Nickel have departed the company but retain 11.7 million shares which have been valued as high as $35 million in 2007.

Robert Healy: listed in the top 20 of hot rocks company Geodynamics with 15.5 million shares which are worth more than $20 million. Also has 5 million shares in Clive Palmer's Australasian Resources.

Martin Albrecht: made plenty as CEO of Thiess for 15 years now chairs Geodynamics where his 1.57 million shares are worth about $2 million.

Domenic Martino: chairman of Clive Palmer's iron ore hopeful Australasian Resources who owns 11.5 million options exercisable at $1.18, with the stock currently at $1.80. Was the CEO of Deloittes forced out after the dotcom boom.

Lee IaFrate: energetic stockbroker who collected more than $20 million from the sale of his 1.868 million shares in the Melbourne-based fund manager, Treasury Group.

Rodney Green: the former chief investment officer at Perpetual has made plenty since parting ways with the funds managment giant, including from his 1.46 million shares in Treasury Group which alone are worth almost $20 million.

Kim Edwards: spent 10 years as managing director of Transurban which delivered more than $20 million. Was paid $3.8 million in his final year and left with a shareholding worth more than $10 million.

John Mulcahy: the CEO of Suncorp has pocketed almost $10 million for his past two year at the insurance and banking company, plus pocketed plenty more in the previous 20 years which included stints with Lend Lease and CBA.

John Prescott: the former BHP CEO was fired on March 4, 1998, sending shares in the Big Australian soaring $1.17 or 8.2% to $15.51. Prescott owned 2.04 million shares so his personal stake rocketed by $2.38 million to more than $31 million on the day he was sacked. That's all for now.

Do ya best, Stephen Mayne