Attempts to make constitutions hard for board tilts


April 11, 2017

This list looks at ASX-listed companies which had restrictions, or attempted to put restrictions on outsiders running for their boards.

Arrium: the old Onesteel attempted to reduce the maximum board size to the current number on the board of 8, with provision to go above by way of casual vacancy. See p7 of the notice of meeting. This was smashed in a poll. See voting results.

AWE: an attempt to lower the maximum from 10 to the current number of 7 and introduce some unspecified nomination requirements (see notice of meeting). Resolution was withdrawn with a majority of the proxy votes against.

Computershare: introduced a requirement that candidates needed support from 10% of shareholders in 2001 but this was later removed.

Healthscope: constitution outlines a range of 3-8 directors and it currently has 6 directors. Nominations must be 45-90 days before AGM and with 100 nominating shareholders like with a resolution.

Macquarie Group: adopted a new constitution in 2010 with a low cap of 10 with discretion for the board to go above but enforced the soft cap when challenged in 2015. See Crikey story.

Medibank Private: p17 of constitution outlines a range of 5-8 directors and it currently has 8 directors. However, Abbott Government slipped in the following barrier to entry in article 11.6 on page 18: "a person is not eligible for election as a Director at a general meeting of the Company unless not less than the number of members specified in the Corporations Act as being required to give notice of a requisitioned resolution at a general meeting of the Company have, at least 45 business days before the general meeting (but no more than 90 business days before the meeting), given the Company at its Registered Office".

Moelis: boutique investment bank which floated in April 2017 with a Freehills advised constitution which outlined a range of 4-7 directors and requires an external candidate for the board to gather 100 signatures or 5% of the stock.

Qantas: constitution has some unique elements on p28. Range is 3 to whatever the board sets and external candidates must have 100 signatures or 5% of the stock behind them.

Orica: failed in an attempt to change its constitution.

Regis Healthcare: constitution outlines a range of 3-8 directors and it currently has 6 directors. Nominations must be 45-90 business days before AGM and supported by at least 100 shareholders like an AGM resolution.

South32: demerged from BHP Billiton in 2015 with a constitution which requires external candidates to be supported by more than 100 shareholders or 5% of the stock, just to nominate. See Crikey story.

St Barbara Mines: reduced maximum board size to current number on the board.

Toll Holdings: proposed a constitution in 2010 which would have required candidates to be supported by more than 100 shareholders or 5% of the stock, just to nominate. See Crikey story.

Treasury Wine Estates: was demerged by the David Crawford-chaired Foster's in 2011 with a constitution just like South32, which required any board challenger to be supported by 100 shareholders or 5% of the issued capital. See clause 26.4 of the constitution.

Wotif: founder Graeme Wood pushed through a constitutional change to reduce maximum board size from 10 to just 6. See farcical rationale on p11 of notice of meeting. Was approved with 125m proxies in favour and 30m against. No poll, just a show of hands. See results.