GPT video and 100 new directors wanted
February 2, 2010
Dear Mayne Reporters,
Sorry to hit you with two editions in less than 18 hours (go here for last night if you missed it), but this tumbling market is throwing up huge issues about the governance and leadership of our major companies.
We've just produced this hard-hitting video calling for heads to roll at GPT and now that the property giant and IAG have this week joined the long list of listed companies looking for new credible independent directors, the question of how boards are populated is becoming more important than ever.
There are now literally dozens of troubled companies looking for new directors but the likes of ABC Learning, Centro and Allco just haven't been able to find anyone prepared to step forward.
Dean Paatsch from proxy adviser Risk Metrics sounded off with this huge attack on the directors club in The Age on June 28, following this earlier press release attacking the 96% average vote that incumbent directors get and the limited gene pool.
Risk Metrics has previously been part of the problem - as we explained in this Mayne Report edition - as we're yet to see them recommend against the re-election of many directors.
For instance, Peter Mansell's performance at WA News has been so bad and his workload is so ridiculous, that he should be opposed at the Oxiana Resources EGM on July 18. What odds he'll get elected with the usual 99% in favour?
I've written a detailed piece on this question of governance and board responsibility for the August edition of Investors Voice, the publication of the Queensland-based Australian Investors Association, which can be viewed here.
Former Macquarie Banker John Green has also written a piece the next edition of Company Director magazine on director liability, an issue which is being reviewed by the Rudd Government.
Green reckons a formula based on fees paid should be used to cap liability because he knows a number of existing NEDs who are winding back their responsibilities and a number of senior executives who have dropped plans for a final career as a non-executive director.
There certainly have been a range of reputations destroyed over the past months, so maybe a new crop of directors should be attracted with higher fees. That said, ASIC needs to substantially boost its woeful jailing record given the shenanigans that have gone down of late.
We just can't have the current situation of too few doing too much and shocking voting results such as the following:
Tony Daniels: after the triple debacle of Pacific Dunlop, Pasminco and Orica (since recovered), he was re-elected to AGL in 2002 with 99% in favour and to ComBank in 2003 with 99% in favour.
Justin Gardiner: the HIH audit committee chairman was re-elected to Hutchison in 2003 and 2006 with 99% in favour and Austar in 2005 with 99.9% in favour.
Catherine Walter: re-elected to NAB's board in 2001 with 99% in favour three months after the $4 billion Homeside debacle when she was chairman of the audit committee.
Stan Wallis: re-elected to AFIC's board with 96% in favour last October despite the AMP and Coles Myer fiascos.
As for the market, I've got a bit adventurous today and picked up 2000 GPT shares at $1.60 and 1500 Macquarie Infrastructure Group shares at $2.01. The paper profit is already about $300 so hopefully we've picked the lows but there really does look to be some screaming buys out there.
My other bigger buy orders of about $3000 at the moment are Asciano at $2.50, Oxiana at $1.95, Mirvac at $2.01, ABC Learning at 70c and Allco Equity Partners at $1.60, which is cheap considering it has got that in cash, plus a claimed $3-plus worth of investments in other companies.
That's all for now.
Do ya best, Stephen Mayne
* The Mayne Report is a multi-media governance website published by Stephen Mayne with occasional email editions. To unsubscribe from the emails click here.
Sorry to hit you with two editions in less than 18 hours (go here for last night if you missed it), but this tumbling market is throwing up huge issues about the governance and leadership of our major companies.
We've just produced this hard-hitting video calling for heads to roll at GPT and now that the property giant and IAG have this week joined the long list of listed companies looking for new credible independent directors, the question of how boards are populated is becoming more important than ever.
There are now literally dozens of troubled companies looking for new directors but the likes of ABC Learning, Centro and Allco just haven't been able to find anyone prepared to step forward.
Dean Paatsch from proxy adviser Risk Metrics sounded off with this huge attack on the directors club in The Age on June 28, following this earlier press release attacking the 96% average vote that incumbent directors get and the limited gene pool.
Risk Metrics has previously been part of the problem - as we explained in this Mayne Report edition - as we're yet to see them recommend against the re-election of many directors.
For instance, Peter Mansell's performance at WA News has been so bad and his workload is so ridiculous, that he should be opposed at the Oxiana Resources EGM on July 18. What odds he'll get elected with the usual 99% in favour?
I've written a detailed piece on this question of governance and board responsibility for the August edition of Investors Voice, the publication of the Queensland-based Australian Investors Association, which can be viewed here.
Former Macquarie Banker John Green has also written a piece the next edition of Company Director magazine on director liability, an issue which is being reviewed by the Rudd Government.
Green reckons a formula based on fees paid should be used to cap liability because he knows a number of existing NEDs who are winding back their responsibilities and a number of senior executives who have dropped plans for a final career as a non-executive director.
There certainly have been a range of reputations destroyed over the past months, so maybe a new crop of directors should be attracted with higher fees. That said, ASIC needs to substantially boost its woeful jailing record given the shenanigans that have gone down of late.
We just can't have the current situation of too few doing too much and shocking voting results such as the following:
Tony Daniels: after the triple debacle of Pacific Dunlop, Pasminco and Orica (since recovered), he was re-elected to AGL in 2002 with 99% in favour and to ComBank in 2003 with 99% in favour.
Justin Gardiner: the HIH audit committee chairman was re-elected to Hutchison in 2003 and 2006 with 99% in favour and Austar in 2005 with 99.9% in favour.
Catherine Walter: re-elected to NAB's board in 2001 with 99% in favour three months after the $4 billion Homeside debacle when she was chairman of the audit committee.
Stan Wallis: re-elected to AFIC's board with 96% in favour last October despite the AMP and Coles Myer fiascos.
As for the market, I've got a bit adventurous today and picked up 2000 GPT shares at $1.60 and 1500 Macquarie Infrastructure Group shares at $2.01. The paper profit is already about $300 so hopefully we've picked the lows but there really does look to be some screaming buys out there.
My other bigger buy orders of about $3000 at the moment are Asciano at $2.50, Oxiana at $1.95, Mirvac at $2.01, ABC Learning at 70c and Allco Equity Partners at $1.60, which is cheap considering it has got that in cash, plus a claimed $3-plus worth of investments in other companies.
That's all for now.
Do ya best, Stephen Mayne
* The Mayne Report is a multi-media governance website published by Stephen Mayne with occasional email editions. To unsubscribe from the emails click here.