Dear Mayne Report Subscribers and a few extras,

First off the bat today, check out our latest video to see the musings of Peter Costello at Friday's declaration of the poll in Higgins. He was right to have a go at my no show, but we will be taking him up on the offer of a briefing to talk through the Federal Government's debt situation.

IWhilst our three staff were having fun chasing Cossie in Melbourne, it was a big day for me in Sin City on Friday which started with 50 minutes of live radio on Virginia Trioli's last Morning program with 702 ABC Sydney.

Despite preparing all this material contrasting Melbourne with Sydney, Trioli wanted none of it so we opened up with Bali and climate change. The one slight diversion was into Qantas when I flagged fronting a potential class action for shareholders who sold out before this recent spate of profit upgrades, as was mentioned in Thursday night's Mayne Report - and fleshed out in more detail for Crikey on Friday afternoon.

Spindoctor Sue Cato joined us on-air at 8.50am and we had lots of funs talking political books, the right wing Liberals in NSW and Peter Costello's lack of spine. Cato personally does the spinning for Telstra chairman Donald McGauchie and she mentioned off air that his recent bone-crushing hand-shake after the Nufarm AGM was just his normal farmer's offering.

Former Hawke Government Tourism Minister John Brown joined us after 9am and he managed a good natured off-air sledge about past attacks in Crikey. Brownie is one of those colourful NSW Labor types who drew the ire of the tax office a few years back for receiving a free $1 million apartment from the late Gold Coast white shoe brigade stalwart Brian Ray.

This all wound up at 9.20am but then we had an interesting discussion outside on the couches over pastries and coffee with ABC cricket guru Neville Oliver, society type Richard Zachariah and The Daily Telegraph's editor-at-large Gary Linnell, who were all their to talk sport with Virginia.

Next stop was a net café to pump out a Qantas item for Crikey and then it was down to The Radisson Hotel for a date with those colourful Gold Coast boys made good, HFA Holdings, which is the lead story in today's full edition.

After HFA, there was a quick coffee with Dani Ecuyer, the high profile anti-pulp mill independent who ran in Wentworth, and then a two hour session with Dan Walsh, the really impressive former IBM sales guy who is building Australia's first social news website, www.kwoff.com.

I've put $10,000 in for a minority stake and am really impressed with what Dan is doing. For instance, you can see the little K for Kwoff at the bottom of every story on www.news.com.au. Dan's already attracted more than 500 members, many of whom are "kwoffing" their favourite discoveries online and enabling fellow Kwoffers to then vote their submissions up and down.

There was also a meeting with a book publisher for a tome that was first publicly mentioned in this Lifehacker profile late last week. The book will hopefully give some real oomph to Australian shareholder activism, but we won't be saying any more until it is inked.

The final Sydney engagement was an evening drink with a fund manager and Mayne Report subscriber at the Union Club in Bent Street. If all our subscribers are as good as this one, we've got a big future.

Having left home at 5am, I staggered in the door at midnight, which partly explains why it's taken this long to update you.

Please click through to the full edition as we have interesting stories about HFA Holdings, a Dream Team Melbourne board, revelations of what might be a $77 million windfall for Commonwealth Bank chairman John Schubert and 20 new names for the Mayne Report Rich List.

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.

There were three members of the Mayne Report Rich List attending the HFA Holdings AGM at The Radisson on Friday - MFS managing director Michael King, HFA chief executive and largest shareholder Spencer Young and MFS director Paul Manka, a tough looking fella who got his start as a Gold Coast financial planner.

King looked like he had a bad hangover and declined to answer my question about how much time he had for HFA given all the juggling with MFS.

Spencer Young speaks at a million miles an hour but the Harvard MBA did seem quite impressive. His personal relationship with Lighthouse Partners' baby-faced boss Sean McGould, a Young President, sounds very special and when asked for the history he explained that it all started in Chicago back in 1999 when he was looking for an American to run some Australian money.

Young and his financial planner mates have since funnelled $3 billion into the Lighthouse funds which have out-performed most competitors on the Australian market, hence the $1 billion-plus market capitalisation the merged group will enjoy when the deal closes next month – three months earlier than originally planned.

I was the only shareholder who spoke at the AGM and managed to fire half a dozen questions which generated about 20 minutes of debate.

At this point, it is worth going back and reading this Crikey account of the November 6 MFS AGM when new chairman Andrew Peacock was put through his paces and Michael King revealed that UBS has an $800 million loan exposure to MFS for its rapidly assembled Peppers hotel business which controls 15,000 hotel beds in Australia but is now not going to be sold to private equity firm CVC.

This is where it gets interesting because since then, CVC's ultimate parent, Citigroup, has got into real strife from the sub-prime write-downs and had to be bailed out by a Middle Eastern oil state.

The same thing happened to UBS, which took another $US10 billion hit last week and then leapt into the arms of the Singapore Government which pumped $US9 billion into Europe's most prestigious investment bank.

Asked to explain the HFA relationship with UBS, Spencer Young was keen to talk up the hedge fund's diversified global funding options, but it was clear that UBS has been key to the growth of HFA, just like it has been for its sister company MFS.

Whilst UBS has well in excess of $1.5 billion to the various MFS and HFA corporate and investment vehicle entities, HFA will be just fine if its 90 investment professional around the world can continue to deliver above average returns. After all, funds management is a winner takes all game and the financial planners who drive the allocations of tens of billions of dollars will continue to support HFA-Lighthouse it whilst the returns and commissions are both good.

The same might not be the case for MFS which is carrying too much property-related debt, something that is going to hit Centro Properties for six later today when its shares resume trading. The sub-prime tornado is getting worse and this might explain why Michael King looked like death warmed up on Friday morning, hunching over his chair and only stopping to mumble a few brief words when leaving the Radisson.

Whilst HFA is a separate vehicle, MFS has been its largest shareholder in recent years, although the Lighthouse deal will dilute it down below 15%. This remains in escrow but don't be surprised if MFS requests some relief from the HFA board to offload the parcel and pay down some of that UBS debt.

Given the recent institutional raising to fund the Lighthouse deal, I also suggested it was time to find at least two highly credible independent directors to give HFA a new sheen of credibility. Spencer Young said he and Sean McGould usually sort everything out within five minutes and he didn't see the need to find credible Australians as HFA was now a global business that would probably look offshore to strengthen the board.

Hmmm, a headstrong CEO who doesn't really believe in the oversight of non-executive directors. Not a good sign. Then again, Spencer features below on our Mayne Report Rich List and his record to date has been impressive. He's one to watch - for potentially good and bad reasons.

A couple of weeks ago The AFR's Andrew Cornell produced his "Dream Team" board led by BHP-Billiton's Don Argus, so we came up with our own version but only agreed with two of his ten selections. The detail of that critique is here but the names were as follows:

AFR Magazine: Don Argus (chair), Jillian Broadbent, Michael Chaney, Chris Corrigan, David Crawford, Patricia Cross, Stephen Johns, Graham Kraehe, Don Mercer, Robert Savage.

Mayne Report: John Schubert (chair), Michael Chaney, David Clarke, John Cloney, David Gonski, Ian Macfarlane, John Morschell, Robert Savage, James Strong.

I recently spoke to a Sydney-based top 50 CEO who was scathing of The AFR's selections, partly because it was "so biased towards people from Melbourne".

Andrew Cornell does indeed live in Melbourne and the criticism is spot on. Our top nine included none from Melbourne whereas Cornell nominated five out of his ten - Don Argus, David Crawford, Patricia Cross, Graham Kraehe and Don Mercer.

The only non-Sydneysider in our team is Perth-based Michael Chaney and he's the only Cornell selection from outside Melbourne or Sydney, so at least we both agree that no-one from Adelaide or Brisbane cuts the mustard.

The relative decline of Melbourne in corporate Australia is best demonstrated by the city's inability to produce top CEOs to run big companies. Melbourne is down to just three companies in the top 15, but each of them - BHP-Billiton, NAB and ANZ - is run by an expat. CSL CEO Brian McNamee is the only Australian running a top 20 company out of Melbourne, whereas back in 1992 eight of the top 10 were run by Australians out of Melbourne.

So, if living in Melbourne was the sole criteria, who would be on Bleak City's Dream Team board? I agree with Cornell's four and would add the following six: Margaret Jackson, Elizabeth Alexander, Laurie Cox, Charles Goode, Rod Eddington and Leigh Clifford.

Elizabeth Alexander has also risen up the rankings in our top female directors list given her fabulous performance as chair of CSL and the recent win Boral had picking up Ethical Investor magazine's 2007 corporate governance award. The Boral annual statements really are worth a look: full financial report, sustainability report, concise annual report. That's how you do it, folks.

All ten we've chosen have flaws but that is the problem with Melbourne - the club is still too tight and too many bad blunders have been made over the years. The Sydney board elite have it all over their Melbourne rivals, which is why Peter Costello really should be allowed to emerge as a major board room force in Melbourne. We need some fresh talent.

* In our original critique of Andrew Cornell's board we erred in suggesting Graham Kraehe wasn't back on the Brambles board as deputy chairman. Don Argus has long been Kraehe's major sponsor and it continued with his resurrection at Brambles, which he originally quit to take the NAB chair, only to find he had to surrender this a year later in a peace deal with Cathy Walter.

John Schubert scored the chairman's gig in our Dream Team board for the following reasons:

John Schubert, chairman: no management blemishes from his time running Esso Australia and Pioneer International, chaired Worley Parsons as it became a powerhouse and has steered the Commonwealth Bank to number one whilst also helping turn around BHP-Billiton since joining the board in 2000. His stint as President of the Business Council cements his credentials for chairman.

However, there was one blemish - sitting on the Qantas board and stoicly endorsing the private equity takeover until the very last when investors were being told blatantly inaccurate information about the airline's soaring prospects. Then again, one director was always going to struggle to stare down that cosy duo of Geoff Dixon and Margaret Jackson, especially when James Packer and the Macquarie Bank machine were also ferociously on board the privatisation bandwagon.

The Qantas board did the right seeing off Jackson and Packer immediately after the bid collapsed and bringing in cleanskin Leigh Clifford as the new chairman was also a good move.

In researching Schubert, it has only just dawned on us that his biggest pay day has come in the three years after he left the Worley Parsons board, which he chaired from 2000, through the float in late 2002 before leaving the board in February 2005.

The stock was trading at around $6 in early 2005 when he retired and Schubert had amassed 1.513 million shares by then, having secured 1.217 million shares before the float, which was priced at just $2 a share.

Worley Parsons closed at $50.91 on Friday, so if Schubert has hung onto his entire stake, this parcel is now worth a staggering $77 million. With the exception of Gary Pemberton at Billabong, no other professional director has had a bigger pay day than this and it is worth reflecting that Schubert was only paid $110,000 in his final full year as Worley chairman.

However, Schubert's Worley riches haven't translated into huge shareholdings in the companies where he remains a director, so maybe he sold out for less than $10 million. He's the Commonwealth Bank chairman with just 24,418 shares worth $1.44 million, whilst his 23,675 BHP-Billiton shares are worth $994,000 and the 34,753 Qantas shares clock in at just $202,000.

Macquarie Bank is well known as the Millionaire Factory, but as you'll see in the next item, Worley Parson has produced at least 10 individuals who have each made more than $20 million, including CEO John Grill whose 13.7% stake was worth $1.676 billion on Friday.

It truly is a great Australian success story that should be celebrated.

Peter Campbell: education industry veteran who is now a non-executive director of listed education provider Navitas, formerly known as IBT Education. Owns 20 million shares worth more than $40 million.

Rod Jones: managing director of listed education provider Navitas, formerly known as IBT Education, who owns 55.6 million shares worth more than $100 million.

Peter Larsen: education industry veteran who is now a non-executive director of listed education provider Navitas, formerly known as IBT Education. Owns 31.2 million shares worth more than $60 million.

Max Shroder: pops up on the top 20 of listed education provider Navitas, formerly known as IBT Education, with 9.4 million shares worth about $20 million.

Julianne Hannaford: pops up on the top 20 of listed education provider Navitas, formerly known as IBT Education, with 9.3 million shares worth about $20 million.

Richard Cottee: managing director of Queensland Gas who owns 6.1 million shares worth about $20 million after a 10-fold surge over the past three years.

Robert Bryson: chairman of Queensland Gas who owns 18.23 million shares worth more than $55 million after a 10-fold surge over the past three years.

John McGrath: made his original pile through his own real estate firm in Sydney but his best little earner of late has been 2.04 million shares in the News Ltd-controlled realestate.com.au which is now worth about $15 million.

Simon Baker: the CEO of www.realestate.com.au owns 3.5 million shares worth about $25 million and has made a few private investments such as a $4 million play buying www.artshub.com.au.

John Green: the former Macquarie Banker makes our list alone on his 941,510 shares in Worley Parsons which are now worth almost $50 million.

Iain Ross: managing director of the Worley Parsons hydro-carbons division whose 466,777 shares are now worth about $23 million.

John Schubert: the chairman of the Commonwealth Bank and BHP-Billiton director made plenty when Hanson took over his Pioneer International a few years back, but his really big earner was Worley Parsons. Back in 2003-04, Schubert's last full year as Worley chairman, he was only paid $110,000 but if he has retained his 1.513 million shares these are now worth more than $75 million after a spectacular surge.

Grahame Campbell: former engineering executive who is now a non-executive director of Worley Parsons whose 504,579 shares are worth about $25 million.

Andrew Wood: runs the mergers and acquisitions division for Worley Parsons and owns 828,238 shares worth more than $40 million.

Eric Fraunschiel: made plenty as Wesfarmers finance director for the 10 years until 2002 and now a professional director, including with Worley Parsons, where his 164,852 shares are worth $8.4 million and Woodside, where his 52,702 shares are worth $2.5 million.

David Housego: the Worley Parson finance director own 157,582 shares worth $8 million but he sold an additional 116,741 shares in 2006-07 and earns more than $1 million a year.

Kevin Fitzpatrick: one of the original backers of wotif.com who sold 36.8 million shares into the 2005 float for $73 million and retains 10 million shares worth more than $50 million.

Robert Brice: one of the original backers of wotif.com who sold 6.8 million shares into the 2005 float for $13.6 million and retains 40 million shares worth more than $200 million.

Lyn Brazil: a well-known rural investor in Queensland whose biggest pay day was backing wotif.com. Sold 16.6 million shares for $33.2 million into the 2005 float and retains 10 million shares worth more than $50 million.

Dick McIlwain: The Tattersall's CEO enjoyed a $15 million-plus pay day when the business merged with Unitab in 2006 but also chairs Super Cheap Auto and Wotif.com, where his 500,000 shares are worth $2.6 million.

That's all for now.

Do ya best, Stephen Mayne

PS. If you happen to be reading this and are not yet a subscriber, why not download this form and support our shareholder activism which, if done well and properly resourced, serves a genuine public benefit. We're looking at twice weekly updates over the summer but the focus will be more concentrated on shareholder activism as we move on from the Federal election campaign.