13 questions at 2021 Northern Star AGM

November 18, 2021

The 13 questions Stephen Mayne asked at the 2021 Northern Star AGM.

1. Thank you for disclosing the proxy votes ahead of the debate. What were the most important changes you made to avoid a second strike. Were you personally involved in lobbying the proxy advisers chair?
Answer: Yes, the chair met with the proxy advisers. The biggest change was not having an executive chair.

2. Why was there a 21% vote against resolution 4. Which proxy advisers opposed and what issues did they raise?

3. Treasury Wine Estates has voluntarily moved to annual elections for directors in line with best practice that occurs in both the US and the UK. Dual listed companies like News Corp, BHP and Rio Tinto all do this due to the laws in the US and UK. What does the chairman, and the four other directors up for election today, including John Fitzgerald, think about Northern Star adopting this model at the 2022 AGM so that all directors can be more regularly accountable to shareholders.

Answer: No, Chair Chaney definitely doesn't like that idea.

4. At the age of 71, the new chairman Michael Chaney has loads of experience but may not be regarded as modern. Could he comment on whether he is keeping up with the times in terms of ESG issues, technology and the like. Is he a competent Zoom or Microsoft Teams meeting chair and is he only intending to serve one 3 year term as chair given his age.

5. In terms of his public company CV that he brings to Northern Star, does Michael Chaney agree that his biggest value-destroying deal was voting as a BHP director to support the 2001 merger with Billiton. The South African company was given 42% of the combined group's shares and the assets they contributed now deliver around 5% of BHP's profits. With the benefit of hindsight, does he now wish that BHP had never done this highly dilutive deal for BHP shareholders during his 10 year stint on the Big Australian's board.

Answer: Yes, Chaney admitted this was a mistake with Billiton getting too big a slice of the combination.

6. Why is the newly appointed CEO chairing this resolution? Shouldn't Northern Star appoint a deputy chair who can step up to chair any discussions about the chair and also lead the annual process to review the chair's performance. Asking the CEO to chair this is not good governance. Could the rest of the directors fix this situation by electing a deputy chair.

Answer: Chaney said his re-election could have been chaired anyone, it was just procedural and most companies with an independent chair don't have a deputy chair.

7. Perth is a small isolated city and too many of the big and small Perth-based listed companies only have directors who live in Perth. What proportion of our directors live in Perth and is the geographical location of directors something which is considered when board diversity is discussed.

Answer: All but one live in Perth and this was very helpful during COVID.

8. Sally Langer proudly declared during her campaign speech she was "proudly born and bred in WA". What does Sharon think about the perspective that Perth is a small isolated city and some of us east coast critics believe too many of the big and small Perth-based listed companies only have directors who live in Perth. What proportion of our directors live in Perth and is the geographical location of directors something which Sharon and the chair believe should be considered when board diversity is discussed.

9. Like Sally, Sharon offered up that she is a "proud West Australian". Does she think that the fact that she serves on two big cap Perth based miners in Fortescue and Northern Star, isn't that just further evidence that the director gene pool in Perth is too narrow. Sure, gold and iron ore are different metals but are there any other NEDs serve on two Perth based miners capitalised at more than $10 billion.

Answer: wrong, she is no longer on the Fortescue board. Whoops.

10. Did any of the 5 main proxy advisers in the Australian market - ACSI, ASA, Ownership Matters, Glass Lewis and ISS - recommend a vote against any of today's resolutions? Which of the proxy advisers are covering us and has their been a material proxy protest vote against any of today's resolutions? Will you disclose the proxy votes before the debate on today's resolutions so shareholders can ask questions if there have been any protest votes?

Answer: ISS opposed the second of the two LTI grants and this triggered the 21% protest vote. It's rationale was wrong and we won't be changing.

11. Why didn't we tap into the widely rorted $88 billion JobKeeper program like 474 other ASX listed companies, including Perth-based Iluka Resources? All you had to do was forecast a drop in revenue, not actually suffer a drop. This was one of the world's most lax, open and abused corporate support schemes. Please explain why we didn't get in on the rort to maximise returns to shareholders and did we explore applying?

Answer: that's a hopeless question. We didn't apply because we didn't need it. This sparked a round of applause from Perth shareholders in the room.

12. When disclosing the outcome of all resolutions today, will the chair support the idea of publicly disclosing how many shareholders voted for and against each item, similar to what happens with a scheme of arrangement? This will provide a better gauge of retail shareholder sentiment on all resolutions and was a disclosure initiative recently adopted by Metcash and Southern Cross Media after their AGMs. What does the chair think of this idea? Link has this data readily to hand, you just need to share it with shareholders.

Answer: no way. We'll stick with the law.

13. Given the interesting discussions across a range of topics today, could the chair undertake to make an archived copy of the webcast plus a full transcript of proceedings available on the company's website. Nine Entertainment chairman Peter Costello, who appreciates the benefit of a parliamentary Hansard transcript where MPs don't have to scroll through old videos to find out what was said, made this change last week & had a full transcript of Nine's AGM online before the end of the day.

Answer: Unlikely, but we'll think about it.