Special report half way through AGM season
November 5, 2010
Dear Mayne Report Season Ticket holders, supporters and a few others,
We've reached the half way point of the public company AGM season and have produced this lively update which includes the following juicy morsels:
How Woolies censored our pokies platform
Toll's humiliating constitutional defeat
Sue Morphet, the McKinsey consultant and that slash and burn decision
ASA advertises for new CEO
Ten says tilt out of time
Billionaire says his female relatives prefer to be mothers
Two trips to Perth for Packer, Twiggy and Stokes - or not?
However, before we get into any of that, here is a summary of all the action from the 13 AGMs we attended in October.
October 29 - Tatt's Group AGM
A 90-minute AGM where made 14 contributions ranging through pokies regulation, executive pay, gender diversity, political risks, director records and the Tabcorp demerger. Listen to audio highlights. Quite a bit came out of it, but there was limited mainstream media. Indeed, the Herald Sun produced this paragraph on Saturday:
Shareholders passed Tatts' remuneration report and re-elected directors Lyndsey Cattermole and Brian Jamieson despite some shareholders questioning their performance on other company boards.
Not sure why that was plural as I was the lone speaker against both. Anyway, below is the best of the audio highlights from a lively AGM where chairman Harry Boon was suitably pugnacious and informative:
Are the CFO and CEO keeping their fees from outside board seats?
What is the potential impact of a change in government in Victoria on the pokies licence?
Could CEO Dick McIlwain explain what he means saying the pokies industry is on the nose globally?
Speaking in favour of remuneration report
Is there any at-risk pay for senior executives based on diversity measures?
Speaking against Lyndsey Cattermole's re-election given Foster's wine debacle
Lyndsey Cattermole's speech about gender diversity
Speaking against Brian Jamieson's re-election given Sigma and Oz Minerals
October 28 - Reece Australia
Made it three AGMs in a row for the little known billionaire Wilson family who control this booming plumbing business. Had six cracks and this scratchy audio includes some rather patronising remarks from executive chairman Alan Wilson saying that the female members of the Wilson family don't have the skills or interest to join the all male board and are more interested being mothers or doing other things.
October 28 - Newcrest Mining
Chairman Don Mercer was surprisingly cranky and two different shareholders apologised for his intemperance after the meeting. You can hear it all on the edited audio but we particularly liked these six exchanges:
Were you caught napping by the RSPT with a response from Minerals Council chair Ian Smith
What did you learn and what was the impact of Greg Hoy's 7.30 Report stories on Lihir tailings?
An "unreasonable question" about Lihir directors then a debate about balance sheet valuations
Calling for CEO Ian Smith to face an election and commenting on CFO sitting on the board
Chairman dismisses suggestions bonuses could be linked to gender diversity outcomes
Supporting a pay rise for directors and warning of a future tilt by "feral feminist" Catherine Deveny
October 27 - Asciano AGM
Arrived late and only made 4 contributions which included a crack at CEO Mark Rowsthorn over his $900,000 sign-on fee for a new contract and strong support for chairman Malcolm Broomhead. Listen to edited audio highlights. The 41% protest vote against the remuneration report was another notable entry on our list tracking the biggest protest votes over the past six years.
October 27 - Leising & Living Australia
Forgot to bring the recorder but Ian McIlwraith from The Age was there researching a big feature on AGMs for the Saturday paper and wrote the following:
PENGUINS. If you were one of the handful of shareholders who turned up to Melbourne Aquarium owner Living and Leisure Australia's AGM this week, you got to see their happy feet (and nine eggs due to hatch shortly), plus quite a few non-market sharks. Pity, because based on the company's sub-3ยข-a-share price, a free visit was worth 1000 shares.
LLA, part of Michael King's failed MFS investment group, was saved from extinction by James Packer's private equity firm Arctic Capital, which now owns almost half of the ridiculously large 2.75 billion shares the company has on issue.
Stephen Mayne (before he crossed the Yarra to have a go at the board of ports and logistics group Asciano over chief executive Mark Rowsthorn's juicy cash rewards) asked Packer's representative on the board, Arctic's chief executive Glenn Wein, whether the billionaire could put small shareholders out of their misery and take over the rest of the company. Wein fairly bristled and took the podium to defend pugnaciously Arctic's role, and the fees it draws. Maybe he expected more of the penguins.
Other investors lamented a perceived lack of cross-promotion of LLA's other tourist attractions like the Otway Fly (a tree-top walk) , or even the Mt Hotham ski fields (although Packer's Crown casino does send a few highrollers its way). Then again, the question about promoting the forest walk was from the man who built and sold it to LLA, Shane Abel.
October 26 - Transurban AGM
Got up on a range of issues including pay, conflicts of interest, Bermudan structures, opportunities in Brisbane, female directors and political risks in Melbourne and Sydney. Listen to the audio highlights and our favourites were as follows:
Why did the rights issue have to be so rushed?
When did we first retain Lazard? Being an advisor to Lazard, did you not see a conflict, Mr Chairman?
Shareholder question about gender diversity on the board and the chairman's statement on that position
Can Bob Officer discuss his relationship with Mr Doherty as a board member of both Transurban and CP2?
Speaking against the re-election of remuneration chair Geoff Cosgriff
It would be good if you could be the first chairman to get Transurban out of Bemuda.
Vote against the remuneration report and change the remuneration committee
October 25 - Pacific Brands AGM
Wasn't going to attend but got a high level tip that CEO Sue Morphet had partnered with Charles Sitch (brother of the comedian Rob Sitch) who in turn had led a $1 million consultancy review for McKinsey which recommended the controversial closure of the company's Australian manufacturing operations. Fairfax's Ian McIlwraith attended the meeting and his two reports which both ran in The SMH are part of this package.
Coincidentally, Sue Morphet and I were at the same Butcher & Co launch function on Thursday night and she came over for a chat and downplayed the issue, saying the McKinsey consultancy work was unrelated to the closure decision and pre-dated the relationship. If that's the case, there's no issue.
October 25 - Tabcorp AGM
Arrived late from Pacific Brands so only really managed to prosecute the gender pay and incentives issues. Listen to audio and see Mayne Report.
October 21 - Amcor AGM
Was a 5 minute hit and run on gender pay issues before a panel discussion in front of 100 women from the finance sector at The Windsor. Listen to brief Amcor AGM audio, see Mayne Report and read transcript.
October 15 - News Corp AGM
Much has already been said about this AGM. Listen to audio, read transcript, see Mayne Report AGM preview and subscriber edition sent out following up AGM, plus this subsequent update.
October 13 - CSL AGM
Was a quick hit and run on gender diversity issue. Listen to audio, read transcript, see subscriber update.
October 13 - JB Hi Fi AGM
Covered a range of territory such as gender diversity, the return of the former CEO to the board and the lack of razzamatazz at the AGM. Listen to audio, read transcript, see Mayne Report, see Lateline Business story.
October 4 - AFIC AGM
Always fun to engage with chairman Bruce Teele and went into some detail about Woolies and the pokies. Listen to audio, read transcript and see Mayne Report.
Who is reading the director rankings lists?
It's good to see some of the boardroom heavyweights read our website. When Tatts Group chairman Harry Boon was asked on Friday afternoon whether the company has any bonuses that are linked to diversity measures, he made reference to this list on our website of directors who should quit boards to make way for more women candidates.
Harry is a Toll Holdings director and was sticking up for his 68-year-old colleague Barry Cusack, who I can't forgive for the whole Oz Minerals disasters, especially the ridiculous payout to former CEO Owen Hegarty.
Anyway, seeing as Harry referenced the list, we've decided to update it by adding our first female entry, as you can see below:
Ten public company directors who should quit now
Ken Cowley: News Corp director since 1979 who turns 76 this year and should stand aside so the Sun King can appoint a second female to the board, joining the young opera singer Natalie Bancroft.
Lindsey Cattermole: has served on the Foster's board since 1999 and supported most of the decisions which has led to an estimated $5 billion of losses in wine.
Barry Cusack: still hanging around the Toll board despite all the disasters of Oxiana and OZ Minerals. Toll has no female directors, so this 68-year should shuffle off promptly to create a vacancy.
Trevor Gerber: dreadful record at Valad Property Group, lead independent director of Macquarie Airports who championed the outrageous $345 million divorce payment to Macquarie and also chaired one of the dud Babcock vehicles. Should be off all public company boards yet Risk Metrics supported his re-election at the 2010 MAPGroup AGM.
Brian Jamieson: having just taken the chair at Sigma Pharmaceutical he is now over-committed. Given the fiasco of OZ Minerals, an all-blokes board, that would be the appropriate position to quit. Also just re-elected for another 3 year term at Tatts Group.
Donald Morley: Hugh Morgan's long-time finance director at WMC is approaching 70 and has done a poor job as the over-paid chairman of post box company Alumina for the past eight years. Also treated retail shareholders appallingly in capital raisings during the GFC.
Peter Ritchie: has served for far too long on the Seven board and didn't exactly himself in glory during the $2 billion Westrac related party deal. Ritchie predicted Seven shares would surpass the record high of $14.68 in 2008. Today they are about half that, suggesting it paid too much to fix Kerry Stokes' $1 billion private debt problem.
David Ryan: still yet to be held to account as the long-time audit committee chair of ABC Learning, he finally resigned as Transurban chairman in August 2010 and should immediately resign as a Lend Lease director.
John Stocker: being Donald McGauchie's surviving chief backer at Telstra and the now departed chair of Sigma Pharmaceutical he should quit all boards, including the struggling Nufarm. Appointed to Telstra in 1996 and still shows no sign of leaving after 14 years.
Murray Wells: has served for far too long on the Seven board and didn't exactly cover himself in glory during the recent $2 billion Westrac related party deal.
Flights booked for upcoming David Jones, Ten and Woolies AGMs
Besides the trip to New York for News Corp, I'm not travelling so much this AGM season but have just booked flights to Sydney for the David Jones AGM on December 3 and Ten Network Holdings at Star City Casino on December 9.
There will also be a trip to Brisbane for the WooIworths AGM on November 18 where I'm running for the board on an anti-pokies platform.
Given that companies must give 28 days notice for AGMs and all those with June 30 balance dates must hold their meetings by the end of November, today's mail bag will hopefully be the last big one we'll get this year.
It takes many hours to sift through 500 notices of meeting but we've now done that and have this pretty comprehensive calendar of upcoming meetings.
To fly to Perth for Kerry, Jamie and Twiggy...or not?
The really difficult decisions include November 19 when Telstra is meeting in Melbourne but a trip to Perth that day would yield WA News led by Kerry Stokes at 10am followed by Twiggy Forest's Fortescue Metals at 2pm. However, who wants to catch the red-eye and get home at 6am on Saturday morning one week before contesting the state election? You can't do it all!
The other lure of Perth is on the final day of the season, November 30, given that James Packer is heading west this year with both Crown and Consolidated Media Holdings gathering with shareholders at Burwood Casino. However, that clashes with Seek's meeting at Crown and I'm now the official ASA monitor for all three classified advertising internet plays.
I let the side down last week by not making it to the first Carsales.com.au AGM because it clashed with both Transurban and, more importantly, a speaking commitment with the Australian Society of Association Executives.
How ironic to miss the first ever gig speaking on behalf of an Association to instead speak at an Association of Association Executives training day.
Australian Shareholders Association looking for a new CEO!
And speaking of Association executives, the Australian Shareholders Association last week placed an advertisement on Seek (of course!) looking for a new CEO because Stuart Wilson called it a day after a solid 11 year stint in charge.
This link to the ad mentions all the requirements and a package of between $140,000 and $160,000. Interesting opportunity!
Woolies joins censorship shame file list
During 40 external board tilts over the past 11 years, there have been plenty of hardball tactics by various companies.
I've been subjected to some unfortunate censorship as you can see from this list and the latest effort comes from Woolworths which only printed this in the notice of meeting ahead of the November 18 contested election in Brisbane:
The following statement is based on information provided by Mr Mayne with his nomination. The biographical details have not been verified independently by Woolworths.
"Stephen Mayne is a Walkley Award winning business journalist, an elected local government councillor in the City of Manningham and a professional shareholder advocate who publishes the corporate governence ezine www.maynereport.com. Mr Mayne has stated that he is standing on a platform that Woolworths divests its gambling interestsor, in the alternative, publicly pledge to implement a system of compulsory, non-transferable and binding pre-commitment for gamblers. Age 41."
Don't you love the way they cast doubts on my credibility by refusing to independently verify the biographical elements of the platform they unilaterally censored without consultation. It takes about 30 seconds on google to establish the Walkley and Manningham council gigs - indeed it's all in the one News Ltd story here. And as for being a shareholder activist, this will be round four with Woolies so they know the drum.
Anyway, enough moaning, this is the full platform that was submitted to Woolies and then butchered by Australia's biggest pokies venue operator:
What we submitted:
Stephen Mayne, age 41. Bcom (Melb). Stephen Mayne is a Walkley award winning business journalist, an elected local government councillor in the City of Manningham and a professional shareholder advocate, who publishes the corporate governance ezine www.maynereport.com.
Mr Mayne believes Woolworths needs more directors in tune with the global focus on corporate social responsibility. In particular, Mr Mayne is concerned about potential damage to the Woolworths brand and franchise from its operation of more than 12,000 pokies at its pubs and clubs through the ALH joint venture with Bruce Mathieson. Woolworths is the only major retailer in the world to have built such a large gambling business and Australians lose more per capita gambling than any other citizens. Mr Mayne believes Woolworths should exit the pokies business or, at the very least, manage its 12,000 pokies in a sustainable and responsible manner.
In addition to the harm sustained by the Australian community from more than $10 billion lost each year on the pokies, existing practices have resulted in an increase in crime both as a result of pokie gambling and upon gamblers themselves. There is also a reported government investigation into management practices at the Woolworths-controlled Richmond Tavern and Aces Sporting Club relating to a defunct basketball and social clubs.
The company's junior pokies partner, Mr Mathieson, is also reportedly able to grant pokie licenses in favour of his preferred football club. Woolworths must show leadership, without waiting for prescriptive legislation from the Federal Government, by embracing full pre-commitment as detailed in the final report of the Productivity Commission. This is paragraph 7.5 of the agreement between MP Andrew Wilkie and Prime Minister Julia Gillard.
This leadership can be demonstrated by publicly pledging to implement a system of compulsory, non-transferable and binding pre-commitment for gamblers in its associated pokies venues. While such a pledge would reduce Woolworths' gambling income derived from addicted gamblers, if not undertaken, Woolworths risks significant damage to shareholder and brand equity. Ultimately, in this era of greater corporate social responsibility, it also risks being unfavourably screened by professional investors who are signatories to the United Nations Principles for Responsible Investment.
* Check out this package on our Woolies tilt, including some historical coverage and videos.
Update on Toll's constitutional reform blunder
Crikey declined to run this tip we submitted for Friday's edition as a breaking news item:
The Toll Holdings board suffered the humiliation of having to withdraw a proposed new constitution at the AGM in Melbourne this morning after only 58% of shareholders supported the move which needed a 75% super majority so get up. See chairman Ray Horsburgh's explanation on page 30 of the presentation pack.
The sticking point was what might be called "the Stephen Mayne clause". At the moment, any single Toll shareholder can nominate for the board, as occurs with most major Australian public companies. Toll was proposing a new barrier to entry such that any external candidate would require 100 wet signatures from shareholders or the support of more than 5% of all shares on issue to get on the ballot paper.
For a company that has never had an external candidate run for its board, this was a remarkably defensive move. Perhaps it reflects the fact that founder CEO Paul Little is transitioning from managing director to a humble non-executive director. At that point, his exemption from the three yearly election cycle will be gone. Maybe someone should nominate against him when he first comes up for election in 2012.
Shareholder defeats are so rare in Australia it was surprising that Fairfax's Ben Butler was the only reporter on Saturday to lead off with that angle.
The Australian's John Durie is normally the country's best commentator on corporate governance issues but his column on Saturday blundered on the detail which was explained as follows:
After a week in which company boards largely ignored shareholder demands, Toll was a beacon of light for shareholder democracy yesterday. It pulled a planned resolution aimed at making it more difficult to call a meeting to roll the board. At the urging of proxy groups led by ISS, 113.5 million shareholders lodged proxies against the motion, with 170.3 million in favour. This meant the resolution would stumble at the 75 per cent hurdle required for a constitutional change, so it was withdrawn by chair Ray Horsburgh.
It was hardly a "beacon of light for shareholder democracy" to propose such a constitutional change in the first place and it was only pulled to avoid the ignominy of formal defeat in a poll. Toll was also not proposing any changes for someone trying to "call a meeting to roll the board". That remains at 100 wet signatures or 5% of the total capital as prescribed by the Corporations Act. The notice of meeting for the Toll AGM makes it very clear that the provision related to external candidates who wish to nominate for the board as an additional director. It is arguably too easy but there isn't exactly a huge problem here given I'm virtually the only external candidate for Australian public company boards and 2-3 tilts a year across all 2000 public companies isn't exactly a disruptive scourge on shareholder democracy.
Incidentally, after Friday's update went out, the following email came back from someone who heard the former BHP-Billiton chairman and NAB CEO speak at a Perth function:
Don Argus spoke at an AICD dinner here recently and he also raised the need to stop this type of nomination by serial offenders. At the time the language he used made me instantly think there was only person he was referring to ... you. He spoke widely on a number of subjects from diversity to the frequency of voting for director positions (he reckons it ought to be annual, for everyone).
I sent a brief email to John Durie yesterday asking that he correct the record about Toll so we'll see what appears tomorrow.
Update on the Ten board tilt that wasn't
Friday's update included a fuller version of a proposed tilt at the Ten Network Holdings board than what Crikey ended up publishing but Ten's general counsel Stephen Partington then set us straight on Friday with the following email:
Stephen
As requested, I acknowledge receipt of your email last evening and your fax earlier today.
I note that TEN notified the ASX on 12 October 2010 that the 2010 annual general meeting is to be held on 9 December 2010.
On this basis, valid nominations for election as a director were required to be received by 19 October 2010.
Thank you for your interest.
Regards
Stephen Partington
Group General Counsel
Oh well, not to worry. We'll get that clarified in Crikey today. The flights have been booked anyway and if James Packer and Lachlan Murdoch really want to storm the barricades at Star City Casino, I'll be there attempting to be an independent participant.
Incidentally, here are the links to an amalgam of observations about the Ten situation we've put out through various different media platforms:
Account of Ten's 2009 AGM after first ever contested board tilt
Feisty 10 minute interview with Jon Faine
Long piece for Fairfax website on various "conspiracy theories"
Comment piece on The Drum about Packer wanting political protection for casinos
Interview on ABC Adelaide sparking Mark Day "conspiracy theorist" sledge
That's all for now. There'll be a big edition on Wednesday for the full 13,000-plus recipients, not just the 300 who received this, detailing the plans for the Victorian election campaign.
Until then, do ya best
Stephen Mayne
* The Mayne Report is a multi-media governance website published by shareholder activist, local government councillor and Crikey founder Stephen Mayne with regular email editions. To unsubscribe, click here. To support our efforts, why not buy a $50 Season Ticket by clicking on the ad on the right hand side of our home page.
We've reached the half way point of the public company AGM season and have produced this lively update which includes the following juicy morsels:
How Woolies censored our pokies platform
Toll's humiliating constitutional defeat
Sue Morphet, the McKinsey consultant and that slash and burn decision
ASA advertises for new CEO
Ten says tilt out of time
Billionaire says his female relatives prefer to be mothers
Two trips to Perth for Packer, Twiggy and Stokes - or not?
However, before we get into any of that, here is a summary of all the action from the 13 AGMs we attended in October.
October 29 - Tatt's Group AGM
A 90-minute AGM where made 14 contributions ranging through pokies regulation, executive pay, gender diversity, political risks, director records and the Tabcorp demerger. Listen to audio highlights. Quite a bit came out of it, but there was limited mainstream media. Indeed, the Herald Sun produced this paragraph on Saturday:
Shareholders passed Tatts' remuneration report and re-elected directors Lyndsey Cattermole and Brian Jamieson despite some shareholders questioning their performance on other company boards.
Not sure why that was plural as I was the lone speaker against both. Anyway, below is the best of the audio highlights from a lively AGM where chairman Harry Boon was suitably pugnacious and informative:
Are the CFO and CEO keeping their fees from outside board seats?
What is the potential impact of a change in government in Victoria on the pokies licence?
Could CEO Dick McIlwain explain what he means saying the pokies industry is on the nose globally?
Speaking in favour of remuneration report
Is there any at-risk pay for senior executives based on diversity measures?
Speaking against Lyndsey Cattermole's re-election given Foster's wine debacle
Lyndsey Cattermole's speech about gender diversity
Speaking against Brian Jamieson's re-election given Sigma and Oz Minerals
October 28 - Reece Australia
Made it three AGMs in a row for the little known billionaire Wilson family who control this booming plumbing business. Had six cracks and this scratchy audio includes some rather patronising remarks from executive chairman Alan Wilson saying that the female members of the Wilson family don't have the skills or interest to join the all male board and are more interested being mothers or doing other things.
October 28 - Newcrest Mining
Chairman Don Mercer was surprisingly cranky and two different shareholders apologised for his intemperance after the meeting. You can hear it all on the edited audio but we particularly liked these six exchanges:
Were you caught napping by the RSPT with a response from Minerals Council chair Ian Smith
What did you learn and what was the impact of Greg Hoy's 7.30 Report stories on Lihir tailings?
An "unreasonable question" about Lihir directors then a debate about balance sheet valuations
Calling for CEO Ian Smith to face an election and commenting on CFO sitting on the board
Chairman dismisses suggestions bonuses could be linked to gender diversity outcomes
Supporting a pay rise for directors and warning of a future tilt by "feral feminist" Catherine Deveny
October 27 - Asciano AGM
Arrived late and only made 4 contributions which included a crack at CEO Mark Rowsthorn over his $900,000 sign-on fee for a new contract and strong support for chairman Malcolm Broomhead. Listen to edited audio highlights. The 41% protest vote against the remuneration report was another notable entry on our list tracking the biggest protest votes over the past six years.
October 27 - Leising & Living Australia
Forgot to bring the recorder but Ian McIlwraith from The Age was there researching a big feature on AGMs for the Saturday paper and wrote the following:
PENGUINS. If you were one of the handful of shareholders who turned up to Melbourne Aquarium owner Living and Leisure Australia's AGM this week, you got to see their happy feet (and nine eggs due to hatch shortly), plus quite a few non-market sharks. Pity, because based on the company's sub-3ยข-a-share price, a free visit was worth 1000 shares.
LLA, part of Michael King's failed MFS investment group, was saved from extinction by James Packer's private equity firm Arctic Capital, which now owns almost half of the ridiculously large 2.75 billion shares the company has on issue.
Stephen Mayne (before he crossed the Yarra to have a go at the board of ports and logistics group Asciano over chief executive Mark Rowsthorn's juicy cash rewards) asked Packer's representative on the board, Arctic's chief executive Glenn Wein, whether the billionaire could put small shareholders out of their misery and take over the rest of the company. Wein fairly bristled and took the podium to defend pugnaciously Arctic's role, and the fees it draws. Maybe he expected more of the penguins.
Other investors lamented a perceived lack of cross-promotion of LLA's other tourist attractions like the Otway Fly (a tree-top walk) , or even the Mt Hotham ski fields (although Packer's Crown casino does send a few highrollers its way). Then again, the question about promoting the forest walk was from the man who built and sold it to LLA, Shane Abel.
October 26 - Transurban AGM
Got up on a range of issues including pay, conflicts of interest, Bermudan structures, opportunities in Brisbane, female directors and political risks in Melbourne and Sydney. Listen to the audio highlights and our favourites were as follows:
Why did the rights issue have to be so rushed?
When did we first retain Lazard? Being an advisor to Lazard, did you not see a conflict, Mr Chairman?
Shareholder question about gender diversity on the board and the chairman's statement on that position
Can Bob Officer discuss his relationship with Mr Doherty as a board member of both Transurban and CP2?
Speaking against the re-election of remuneration chair Geoff Cosgriff
It would be good if you could be the first chairman to get Transurban out of Bemuda.
Vote against the remuneration report and change the remuneration committee
October 25 - Pacific Brands AGM
Wasn't going to attend but got a high level tip that CEO Sue Morphet had partnered with Charles Sitch (brother of the comedian Rob Sitch) who in turn had led a $1 million consultancy review for McKinsey which recommended the controversial closure of the company's Australian manufacturing operations. Fairfax's Ian McIlwraith attended the meeting and his two reports which both ran in The SMH are part of this package.
Coincidentally, Sue Morphet and I were at the same Butcher & Co launch function on Thursday night and she came over for a chat and downplayed the issue, saying the McKinsey consultancy work was unrelated to the closure decision and pre-dated the relationship. If that's the case, there's no issue.
October 25 - Tabcorp AGM
Arrived late from Pacific Brands so only really managed to prosecute the gender pay and incentives issues. Listen to audio and see Mayne Report.
October 21 - Amcor AGM
Was a 5 minute hit and run on gender pay issues before a panel discussion in front of 100 women from the finance sector at The Windsor. Listen to brief Amcor AGM audio, see Mayne Report and read transcript.
October 15 - News Corp AGM
Much has already been said about this AGM. Listen to audio, read transcript, see Mayne Report AGM preview and subscriber edition sent out following up AGM, plus this subsequent update.
October 13 - CSL AGM
Was a quick hit and run on gender diversity issue. Listen to audio, read transcript, see subscriber update.
October 13 - JB Hi Fi AGM
Covered a range of territory such as gender diversity, the return of the former CEO to the board and the lack of razzamatazz at the AGM. Listen to audio, read transcript, see Mayne Report, see Lateline Business story.
October 4 - AFIC AGM
Always fun to engage with chairman Bruce Teele and went into some detail about Woolies and the pokies. Listen to audio, read transcript and see Mayne Report.
Who is reading the director rankings lists?
It's good to see some of the boardroom heavyweights read our website. When Tatts Group chairman Harry Boon was asked on Friday afternoon whether the company has any bonuses that are linked to diversity measures, he made reference to this list on our website of directors who should quit boards to make way for more women candidates.
Harry is a Toll Holdings director and was sticking up for his 68-year-old colleague Barry Cusack, who I can't forgive for the whole Oz Minerals disasters, especially the ridiculous payout to former CEO Owen Hegarty.
Anyway, seeing as Harry referenced the list, we've decided to update it by adding our first female entry, as you can see below:
Ten public company directors who should quit now
Ken Cowley: News Corp director since 1979 who turns 76 this year and should stand aside so the Sun King can appoint a second female to the board, joining the young opera singer Natalie Bancroft.
Lindsey Cattermole: has served on the Foster's board since 1999 and supported most of the decisions which has led to an estimated $5 billion of losses in wine.
Barry Cusack: still hanging around the Toll board despite all the disasters of Oxiana and OZ Minerals. Toll has no female directors, so this 68-year should shuffle off promptly to create a vacancy.
Trevor Gerber: dreadful record at Valad Property Group, lead independent director of Macquarie Airports who championed the outrageous $345 million divorce payment to Macquarie and also chaired one of the dud Babcock vehicles. Should be off all public company boards yet Risk Metrics supported his re-election at the 2010 MAPGroup AGM.
Brian Jamieson: having just taken the chair at Sigma Pharmaceutical he is now over-committed. Given the fiasco of OZ Minerals, an all-blokes board, that would be the appropriate position to quit. Also just re-elected for another 3 year term at Tatts Group.
Donald Morley: Hugh Morgan's long-time finance director at WMC is approaching 70 and has done a poor job as the over-paid chairman of post box company Alumina for the past eight years. Also treated retail shareholders appallingly in capital raisings during the GFC.
Peter Ritchie: has served for far too long on the Seven board and didn't exactly himself in glory during the $2 billion Westrac related party deal. Ritchie predicted Seven shares would surpass the record high of $14.68 in 2008. Today they are about half that, suggesting it paid too much to fix Kerry Stokes' $1 billion private debt problem.
David Ryan: still yet to be held to account as the long-time audit committee chair of ABC Learning, he finally resigned as Transurban chairman in August 2010 and should immediately resign as a Lend Lease director.
John Stocker: being Donald McGauchie's surviving chief backer at Telstra and the now departed chair of Sigma Pharmaceutical he should quit all boards, including the struggling Nufarm. Appointed to Telstra in 1996 and still shows no sign of leaving after 14 years.
Murray Wells: has served for far too long on the Seven board and didn't exactly cover himself in glory during the recent $2 billion Westrac related party deal.
Flights booked for upcoming David Jones, Ten and Woolies AGMs
Besides the trip to New York for News Corp, I'm not travelling so much this AGM season but have just booked flights to Sydney for the David Jones AGM on December 3 and Ten Network Holdings at Star City Casino on December 9.
There will also be a trip to Brisbane for the WooIworths AGM on November 18 where I'm running for the board on an anti-pokies platform.
Given that companies must give 28 days notice for AGMs and all those with June 30 balance dates must hold their meetings by the end of November, today's mail bag will hopefully be the last big one we'll get this year.
It takes many hours to sift through 500 notices of meeting but we've now done that and have this pretty comprehensive calendar of upcoming meetings.
To fly to Perth for Kerry, Jamie and Twiggy...or not?
The really difficult decisions include November 19 when Telstra is meeting in Melbourne but a trip to Perth that day would yield WA News led by Kerry Stokes at 10am followed by Twiggy Forest's Fortescue Metals at 2pm. However, who wants to catch the red-eye and get home at 6am on Saturday morning one week before contesting the state election? You can't do it all!
The other lure of Perth is on the final day of the season, November 30, given that James Packer is heading west this year with both Crown and Consolidated Media Holdings gathering with shareholders at Burwood Casino. However, that clashes with Seek's meeting at Crown and I'm now the official ASA monitor for all three classified advertising internet plays.
I let the side down last week by not making it to the first Carsales.com.au AGM because it clashed with both Transurban and, more importantly, a speaking commitment with the Australian Society of Association Executives.
How ironic to miss the first ever gig speaking on behalf of an Association to instead speak at an Association of Association Executives training day.
Australian Shareholders Association looking for a new CEO!
And speaking of Association executives, the Australian Shareholders Association last week placed an advertisement on Seek (of course!) looking for a new CEO because Stuart Wilson called it a day after a solid 11 year stint in charge.
This link to the ad mentions all the requirements and a package of between $140,000 and $160,000. Interesting opportunity!
Woolies joins censorship shame file list
During 40 external board tilts over the past 11 years, there have been plenty of hardball tactics by various companies.
I've been subjected to some unfortunate censorship as you can see from this list and the latest effort comes from Woolworths which only printed this in the notice of meeting ahead of the November 18 contested election in Brisbane:
The following statement is based on information provided by Mr Mayne with his nomination. The biographical details have not been verified independently by Woolworths.
"Stephen Mayne is a Walkley Award winning business journalist, an elected local government councillor in the City of Manningham and a professional shareholder advocate who publishes the corporate governence ezine www.maynereport.com. Mr Mayne has stated that he is standing on a platform that Woolworths divests its gambling interestsor, in the alternative, publicly pledge to implement a system of compulsory, non-transferable and binding pre-commitment for gamblers. Age 41."
Don't you love the way they cast doubts on my credibility by refusing to independently verify the biographical elements of the platform they unilaterally censored without consultation. It takes about 30 seconds on google to establish the Walkley and Manningham council gigs - indeed it's all in the one News Ltd story here. And as for being a shareholder activist, this will be round four with Woolies so they know the drum.
Anyway, enough moaning, this is the full platform that was submitted to Woolies and then butchered by Australia's biggest pokies venue operator:
What we submitted:
Stephen Mayne, age 41. Bcom (Melb). Stephen Mayne is a Walkley award winning business journalist, an elected local government councillor in the City of Manningham and a professional shareholder advocate, who publishes the corporate governance ezine www.maynereport.com.
Mr Mayne believes Woolworths needs more directors in tune with the global focus on corporate social responsibility. In particular, Mr Mayne is concerned about potential damage to the Woolworths brand and franchise from its operation of more than 12,000 pokies at its pubs and clubs through the ALH joint venture with Bruce Mathieson. Woolworths is the only major retailer in the world to have built such a large gambling business and Australians lose more per capita gambling than any other citizens. Mr Mayne believes Woolworths should exit the pokies business or, at the very least, manage its 12,000 pokies in a sustainable and responsible manner.
In addition to the harm sustained by the Australian community from more than $10 billion lost each year on the pokies, existing practices have resulted in an increase in crime both as a result of pokie gambling and upon gamblers themselves. There is also a reported government investigation into management practices at the Woolworths-controlled Richmond Tavern and Aces Sporting Club relating to a defunct basketball and social clubs.
The company's junior pokies partner, Mr Mathieson, is also reportedly able to grant pokie licenses in favour of his preferred football club. Woolworths must show leadership, without waiting for prescriptive legislation from the Federal Government, by embracing full pre-commitment as detailed in the final report of the Productivity Commission. This is paragraph 7.5 of the agreement between MP Andrew Wilkie and Prime Minister Julia Gillard.
This leadership can be demonstrated by publicly pledging to implement a system of compulsory, non-transferable and binding pre-commitment for gamblers in its associated pokies venues. While such a pledge would reduce Woolworths' gambling income derived from addicted gamblers, if not undertaken, Woolworths risks significant damage to shareholder and brand equity. Ultimately, in this era of greater corporate social responsibility, it also risks being unfavourably screened by professional investors who are signatories to the United Nations Principles for Responsible Investment.
* Check out this package on our Woolies tilt, including some historical coverage and videos.
Update on Toll's constitutional reform blunder
Crikey declined to run this tip we submitted for Friday's edition as a breaking news item:
The Toll Holdings board suffered the humiliation of having to withdraw a proposed new constitution at the AGM in Melbourne this morning after only 58% of shareholders supported the move which needed a 75% super majority so get up. See chairman Ray Horsburgh's explanation on page 30 of the presentation pack.
The sticking point was what might be called "the Stephen Mayne clause". At the moment, any single Toll shareholder can nominate for the board, as occurs with most major Australian public companies. Toll was proposing a new barrier to entry such that any external candidate would require 100 wet signatures from shareholders or the support of more than 5% of all shares on issue to get on the ballot paper.
For a company that has never had an external candidate run for its board, this was a remarkably defensive move. Perhaps it reflects the fact that founder CEO Paul Little is transitioning from managing director to a humble non-executive director. At that point, his exemption from the three yearly election cycle will be gone. Maybe someone should nominate against him when he first comes up for election in 2012.
Shareholder defeats are so rare in Australia it was surprising that Fairfax's Ben Butler was the only reporter on Saturday to lead off with that angle.
The Australian's John Durie is normally the country's best commentator on corporate governance issues but his column on Saturday blundered on the detail which was explained as follows:
After a week in which company boards largely ignored shareholder demands, Toll was a beacon of light for shareholder democracy yesterday. It pulled a planned resolution aimed at making it more difficult to call a meeting to roll the board. At the urging of proxy groups led by ISS, 113.5 million shareholders lodged proxies against the motion, with 170.3 million in favour. This meant the resolution would stumble at the 75 per cent hurdle required for a constitutional change, so it was withdrawn by chair Ray Horsburgh.
It was hardly a "beacon of light for shareholder democracy" to propose such a constitutional change in the first place and it was only pulled to avoid the ignominy of formal defeat in a poll. Toll was also not proposing any changes for someone trying to "call a meeting to roll the board". That remains at 100 wet signatures or 5% of the total capital as prescribed by the Corporations Act. The notice of meeting for the Toll AGM makes it very clear that the provision related to external candidates who wish to nominate for the board as an additional director. It is arguably too easy but there isn't exactly a huge problem here given I'm virtually the only external candidate for Australian public company boards and 2-3 tilts a year across all 2000 public companies isn't exactly a disruptive scourge on shareholder democracy.
Incidentally, after Friday's update went out, the following email came back from someone who heard the former BHP-Billiton chairman and NAB CEO speak at a Perth function:
Don Argus spoke at an AICD dinner here recently and he also raised the need to stop this type of nomination by serial offenders. At the time the language he used made me instantly think there was only person he was referring to ... you. He spoke widely on a number of subjects from diversity to the frequency of voting for director positions (he reckons it ought to be annual, for everyone).
I sent a brief email to John Durie yesterday asking that he correct the record about Toll so we'll see what appears tomorrow.
Update on the Ten board tilt that wasn't
Friday's update included a fuller version of a proposed tilt at the Ten Network Holdings board than what Crikey ended up publishing but Ten's general counsel Stephen Partington then set us straight on Friday with the following email:
Stephen
As requested, I acknowledge receipt of your email last evening and your fax earlier today.
I note that TEN notified the ASX on 12 October 2010 that the 2010 annual general meeting is to be held on 9 December 2010.
On this basis, valid nominations for election as a director were required to be received by 19 October 2010.
Thank you for your interest.
Regards
Stephen Partington
Group General Counsel
Oh well, not to worry. We'll get that clarified in Crikey today. The flights have been booked anyway and if James Packer and Lachlan Murdoch really want to storm the barricades at Star City Casino, I'll be there attempting to be an independent participant.
Incidentally, here are the links to an amalgam of observations about the Ten situation we've put out through various different media platforms:
Account of Ten's 2009 AGM after first ever contested board tilt
Feisty 10 minute interview with Jon Faine
Long piece for Fairfax website on various "conspiracy theories"
Comment piece on The Drum about Packer wanting political protection for casinos
Interview on ABC Adelaide sparking Mark Day "conspiracy theorist" sledge
That's all for now. There'll be a big edition on Wednesday for the full 13,000-plus recipients, not just the 300 who received this, detailing the plans for the Victorian election campaign.
Until then, do ya best
Stephen Mayne
* The Mayne Report is a multi-media governance website published by shareholder activist, local government councillor and Crikey founder Stephen Mayne with regular email editions. To unsubscribe, click here. To support our efforts, why not buy a $50 Season Ticket by clicking on the ad on the right hand side of our home page.