Wrap of 2023 NAB board tilt

December 28, 2023

On December 15 2023, it was public company tilt number 56 with a run at the NAB board. The background and arguments are explained below.

Coinciding with its full year results on Thursday, November 9, National Australia Bank released this notice of meeting for its December 15 AGM.

The NoM publicly revealed that NAB was facing a contested board election on the unusual platform of a candidate calling for a delay to NAB's AGM cycle.

The tilt was designed to pressure 4 of our listed banks - NAB, Westpac, ANZ and Bank of Queensland - to end the practice of closing off board nominations each year before they've even released their full year results. The likes of Orica, Elders and Incitec Pivot do the same.

They do this by holding premature AGMs before Christmas even though their financial year end is September 30 and they legally have until the end of February to hold their meetings.

Up until around 20 years ago, the big banks used to hold their AGMs in January or February but then they all switched to getting it done before Christmas.

With public company AGM attendance in crisis - only 80 of the 178,000 Qantas shareholders turned up for its recent AGM in Melbourne - I've long held the view that our banks should actively stimulate attendance by holding their AGMs during the Australian Open tennis tournament in Melbourne.

This is the premier sporting event in Australia, attracting tens of thousands of interstate visitors, particularly the sorts of cashed up retirees who like tennis and own bank shares.

So rather than Melbourne-based NAB rotating their AGM around Australia in the two weeks before Christmas each year attracting small attendance numbers, leave it permanently in the home town, twin it with the Australian open and proudly get attendance numbers above 1000, whilst also providing some tennis hospitality for some of the larger retail shareholders.

After lodging the tilt on October 14 - the last day before nominations closed - NAB chair Phil Chronican sent an email outlining a range of issues, including requests for loads of information to satisfy various compliance tests.

Below is the response sent back to Phil and company secretary Louise Thomson. Thankfully, they agreed, and there were no more requests beyond seeking a photo for the notice of meeting and a recorded audio message to play during the meeting.

Letter responding to correspondence from chair Phil Chronican

Dear Phil and Louise,

I've read your correspondence regarding my nomination for the NAB board and would like to propose a different course.

Given my track record of failing at all 55 previous tilts at public company boards, rather than commencing a process which assumes I could somehow finish up as a NAB director, let's just assume that history repeats and the shareholders vote against such a proposal.

Therefore, rather than wasting everyone's time on an assessment, interview or probity process, let's just go back to what happened in most of my first 40 board tilts when boards would simply recommend against without even so much as interviewing me.

If we take this approach, I'd be comfortable with NAB including sentiments such as the following in the notice of meeting.

The board recommends shareholders vote against the election of Mr Mayne, who declined to engage with NAB's usual director recruitment or assessment processes, citing the unlikelihood of success in his candidacy. If a majority of directed votes did support Mr Mayne's election after the conclusion of the poll at the AGM, he would not be able to formally join the board until satisfying the various probity and regulatory requirements in the etc etc.

At the end of the day, NAB is owned by its 500,000+ shareholders and it is they who decide who serves on the board, not any government or any regulatory agency. I don't believe it is appropriate for the NAB board or executives of the bank to put barriers in the way of a shareholder nominating for election to the board.

As for Phil's comments about the advantages of rushing a pre-Christmas AGM, I really believe he has misunderstood the purpose and practical functioning of the AGM.

Engaged retail shareholders, proxy advisers, fund managers and the like are generally fairly exhausted by the end of the main AGM season on November 30 each year. It is unreasonable that 3 of our Big Four banks then choose to cram their own AGMs in the two weeks before Christmas, when most people are distracted by year end events, holiday preparation and Christmas shopping.

If you go back and look at your AGM attendance numbers in recent years, you will find that less than 0.1% of your shareholders are turning up to your December gathering, which is perhaps how you like it.

I'm proposing a solution which would actually increase attendance.

Please remember that most AGM attendees are retirees. They are always on holiday. Therefore, if our big Melbourne-based banks timed their AGM to coincide with the most popular sporting event in Australia each year, it would maximise attendance numbers.

That said, I acknowledge your point that an AGM before Australia Day would indeed generate some “difficulty of engaging with investors and proxies in the weeks leading up to the AGM”. Under the law, you have until February 28 each year to hold the AGM, so if investor holidays in January is a problem, why not twin the AGM with the release of the December quarter report in mid-February. Many companies do this but NAB has no breaking news on AGM today, because it is so soon after the full year results release. Remember, the main problem we are trying to fix is NAB closing off board nominations before telling shareholders how it has performed for the full year.

I strongly disagree with your comment that “we should wind up the Bank's business for the financial year before the end of the calendar year”.

The AGM is not really part of the bank's business. Given that 95%+ of votes cast are completed by the proxy deadline 48 hours before the meeting, the actual day is primarily a “voting results announcement event” and an engagement process with a very small proportion of your retail shareholders.

Rather than worrying about the staff involved in working on the AGM, your primary focus should be running a fair and compliant election process. At the moment, you are not. I have had to nominate before even seeing your full year presentation and now we are up against the clock with all this paperwork.

If you're worried about the workload for staff, can I suggest you cease the practice of physically rotating the AGM around the country. After attending more than 650 AGMs since 1998, I can tell you that Sydney is one of the worst cities for AGM attendance. If you really want to draw a crowd, hold it in Adelaide, which is the “AGM attendance capital of Australia” given the city is so easy to get around and not much happens in Adelaide.

Ever since running for the NAB and CBA boards in 2000, I've noticed a trend where Melbourne gets a disproportionately small share of Big Four bank AGMs. ANZ and NAB have tended to rotate away from Melbourne, far more than Westpac and CBA have rotated in.

It is not too late to change arrangements for the upcoming meeting. Rather than taking the whole NAB caravan to Sydney shortly before Christmas, just book the top floor of the RACV Club in Melbourne, some time during The Australian open.

It doesn't matter if some of the directors aren't in attendance due to holiday commitments. The voting will be done and dusted by the time of the meeting anyway. An AGM just needs the chair, CEO, CFO, company secretary, audit and rem committee chairs and the candidates for election.

If you do this, I'll happily withdraw but I'm not going to repeat the CBA exercise of 2020 when the bank deluged me with a ridiculous amount of information and compliance requests after lodgment and I responded by withdrawing rather than getting bogged down for days.

You may contemplate refusing to put the resolution to the vote, but given your history of running contingent resolutions put up by climate activist groups, this would not be a sensible move.

Let's just run this as a contingent resolution – if it passes, it will be contingent on various probity and regulatory tests being passed.

If you do agree to put this resolution up, the next important issue is running a fair election. I've been astonished by some of the biased ballot papers that major companies have produced over the years and now firmly believe that an independent agency such as the AEC should oversee contested corporate elections, as occurs with union elections.

When I first ran for the NAB board in 2000, I was delighted to receive around 9% of the vote. However, the last Big Four board tilt was CBA in 2014 when I polled just 3.14%. You've got nothing to worry about and don't need to employ aggressive practices to suppress my vote.

As you can see from this list, many companies have produced biased ballot papers. NAB's effort against me in 2009 was not good.

Finally, on the question of access to the share registry, I will pay the standard $250 to receive a spreadsheet listing the 5,000 largest beneficial owners, as per previous court determinations dating back to David Tweed's nefarious activities.

Kind regards
Stephen Mayne

How NAB tilt finished

In the end I pretty much ran dead and received a miserable 1.25% support in the poll after none of the proxy advisers supported the tilt.

The proxies were disclosed early on the day and I was at Phillip Island rather than Sydney, so just dialled into the meeting to answer any questions after the bank agreed to run an audio recording in support of the tilt.

Three shareholders spoke to the matter and I answered one question down the phone line.

All of the other director candidates received more than 97% support so it was a very lopsided voting outcome.

See poll results and webcast archive of 4 hour and 20 minute meeting and this wrap of all the action.

In terms of what did happen, watch the following video grabs via Twitter:

Chair Phil Chronican introduces the resolution and start of speech

Majority of recorded speech about delaying the AGM

Support from Kaz on the floor who wants a possum stirrer on the board

Bollocked by retired farmer "Colin" who loved the AWB

Responding to Fiona Backman's question about relevant skills