Fairfax pulls ther old ' no vacancy' trick, Gunns cowboys

July 28, 2008

Here are Stephen Mayne's two stories from the Crikey edition on Wednesday, 26 October, 2005.

24. Ron Walker's Fairfax pulls the dodgy "no vacancy" trick

By Stephen Mayne

Ron Walker and his John Fairfax board colleagues have shown that they don't believe in free and fair elections by pulling the old "no vacancy" trick to ensure Crikey's board tilt fails, even though the company currently only has seven directors.

With the constitution allowing Fairfax to have twice as many directors, who does this board think they are to arbitrarily declare that seven is the maximum at this year's AGM on November 18, so we have four candidates for only three vacancies?

This means Crikey will have to get 100% of the directed proxies and hope that one of the three incumbents, Mark Burrows, David Evans and Peter Young, gets below 90% and that the open proxies are less than 5%. If that doesn't happen, this outsider's tilt is statistically impossible, so you can see how dodgy the old "no vacancy" tactic is.

We gave Fairfax plenty of time to consider this issue and held out some hope when the notice of meeting was delayed for two weeks longer than ever before, but when it came down to a decision, the board opted to manipulate the election and take the corporate governance low road.

For some reason, Fairfax haven't released their notice of meeting to the ASX but we got one as a shareholder late last week. Chairman Ron Walker has managed to avoid an election this year and it will be interesting to know the process that led to Mark Burrows facing a poll only two years into his three year term.

Donald McGauchie put his hand up and stepped forward to face an election when he didn't have to at the Telstra AGM yesterday, but Ron Walker wasn't so brave. It will be interesting to find out whether Burrows volunteered or was selected by way of ballot. Here is the list of director elections at Fairfax over the past five years:

2001: Jonathan Pinshaw and Fred Hilmer
2002: Julia King and Dean Wills
2003: Mark Burrows, Roger Corbett, Ron Walker, Margaret Jackson and David Gonski
2004: Joan Withers, Dean Wills and Julia King
2005: Mark Burrows, David Evans and Peter Young

With Jackson and Gonski gone from the 2003 vintage, it was a case of selecting one candidate out of Burrows, Walker and Woolworths CEO Roger Corbett to face an election along with the two newcomers, David Evans and Liberal Party networker Peter Young.

Just like Sol Trujillo, new Fairfax CEO David Kirk has elected to change company policy and take up the exemption that CEOs don't have to be elected. This seems to be an increasing trend of recent times. What are these guys afraid of? No incumbent top 200 CEO has been voted off a board by shareholders in Australian public company history.

26. A date with the Gunns Ltd cowboys

By Stephen Mayne

Still gripped with jetlag after arriving back from New York yesterday, Crikey was today on a 10.30am flight to Launceston ahead of tomorrow's Gunns Ltd AGM for the first public company board tilt since getting a woeful 12% of the vote at the AMP AGM in May 2003.

With the departure of Rupert Murdoch and News Corporation to the US, Gunns boss John Gay is the only executive chairman in the ASX 200 who doesn't submit himself to the three-yearly annual election cycle, an exemption that is meant to apply only to chief executives, not those who double as chairman as well. This is the sole issue I'm running on, and will continue to run on every year until John Gay yields.

It's good enough for executive chairmen like James Packer, Frank Lowy, Gerry Harvey and Kerry Stokes to submit themselves to three-yearly elections, but not our resident Tasmanian cowboy, John Gay.

Gunns have previously locked out the press from shareholder meetings, something that no other top 200 company does, so it will be interesting to see if this reprehensible tactic continues.

The Gunns 20, who are tied up in litigation with the company, will no doubt be out in force at tomorrow's AGM, as will numerous Greenies. It will also be interesting to hear what John Gay says about Mark Latham's claims that he runs Tasmania, with Paul Lennon unable to scatch himself without clearing it first with the Gunns boss.

The sagging share price and rumors of a Futuris takeover bid are two other issues Crikey will be raising, whiel the Greenies will no doubt be all over the proposed $1 billion Tamar Valley pulp mill.