Summary of action at 2026 ARB Group (ARB) physical AGM

Stephen Mayne: there's a lot of private equity activity in the market at the moment, Cleanaway, Reliance Worldwide, a whole range of them. Are we ready if someone comes knocking? Have we got a defense adviser on the books? And have we heard any noise?

Chair Robert Fraser: I think the best way to be ready, Stephen, is to increase our profitability. I mean, as a corporate adviser myself with a long background in merchants and takeovers, acutely aware of perhaps the vulnerability that we've had. We've probably been protected from it in previous years when the PE ratio is significantly higher. To some extent, we probably still are because our PE relative to other automotive companies around the world that have had major debt issues or restructurings. We don't have that. But we're certainly aware that we need to perform as the best way to the best defense that we can have. But no, we haven't engaged a formal adviser.

Stephen Mayne: Have you war-gamed it at all in terms of how you would react and how you play it?

Robert Fraser: We've certainly got advisers that we have spoken to in relation to various corporate matters. So I won't go into specific details, but there are certainly people that follow ARB that are really in regular contact with us that we could engage with if we needed to a short notice.

Stephen Mayne: Okay. Now last year, there was a nearly 20% vote against your re-election. What was that all about? And have there been any similar material against votes today?

Robert Fraser: Certainly, look, I covered that last year, Stephen. It was mostly in relation to perceived overboarding, which for anyone that knows me would realize that, that's a pretty unfair comment because my Board is an absolute priority, and I give it everything and I certainly wouldn't take on a board unless I had the time and I make – make it a great priority and a commitment. But since that period, I've relinquished my Chairmanship of Magellan Asset Management. That was 18 months ago. And to be perfect honest, that was taking up more time than any of the boards that I've been on. And my executive role within Taylor Collison has been scaling down over the years, and we'll continue to do so. So I think that's been addressed. As to – has there been any similar sort of protest vote? I think that's sort of what it was last year. The answer is no. I think you'll see the proxies later. So perhaps I'll disclose those. I think the proxy is because we – as a good practice, we disclose those proxy figures before shareholders vote anyway. But I think Ian is at 93%, and Rogers at 87% that are off the top of my head. So I don't think we've had the same level of protest vote.

Stephen Mayne: Just the last question. I'm not sure come back to have another later. Over the long journey for the Browns, have you ever been – this is Andrew and Roger - have you ever been on the opposite sides of a non-unanimous vote in the Board?

Andrew Brown: No.

Stephen Mayne: Has there ever been a non-unanimous vote in the Board overall?

Roger Brown: No. Could you sit down, Stephen. Please that's enough, okay? You've had your turn. I've watched you at other meetings. Just sit there.

Robert Fraser: I'll take that – I'll take the question. Well, Roger has answered the question. The answer is no, there has never been. That's absolutely not to say that there aren't very vigorous debates and discussions around the boardroom table. But once the decision is taken, I think you've strongly supported decision, and that's what we do as a Board. So just...

Stephen Mayne: I'm just inquiring on the challenging culture within the Board, that's all.

Robert Fraser: I think – look, I think that – Stephen, that's been – I think that – I think I've answered that. I said we have very vigorous discussions even between individuals...

Stephen Mayne: So I think as we've just seen, it must be very difficult disagreeing with the Browns.

Robert Fraser: That's an observation. I wouldn't agree with that observation. But you're certainly entitled to it. There's no issue. And I have no issue with you asking the question. Any other – I'm sure there are other questions.

LATER IN THE MEETING

Stephen Mayne: I'll stay seated at this time. Just a question on AGM process. I was hoping to go to 4 AGMs today. AUI, Treasury Wines, Cogstate, all having hybrids in Melbourne. And obviously, you're having a dinosaur physical meeting with no ability for online questions. Just wondering if you'd be able to make a commitment to allow for online written questions next year? You've got everything set up. You're doing the webcast, you're hiring the speakers, you hired the room. It's not as – if there's not actually a big cost difference in just bolting on online questions. So I'd just like to ask if you could actually make that commitment for next year?

Robert Fraser: I won't make that commitment that we will hold in that format, but I will make the commitment that we will consider it. And I don't mean to fob off the question. We actually do consider it very carefully every year. If there are 4 AGMs, all on the one, not sure that us having a hybrid would allow you to...

Stephen Mayne: At home, you can, but if you have to turn up to one, it means you can't go to a whole bunch of other meetings...

Robert Fraser: All right. We look at it absolutely every year. We continue to think that is the most appropriate format. You can say that we're a dinosaur but that means there are a lot of dinosaurs or still in Australia because, as you know, not all companies on that format. In fact, there's still a significant number (holding in person meetings)...just recently, we did extend the coverage. I know it doesn't necessarily help you in terms of your online questioning, but we extended the coverage right way through the meeting rather than just do the actual formal presentations we put it through. And we also – I mean, we encourage I said in my address earlier, we encourage shareholders to send any questions before the meeting. If you have genuine questions, we can include them in the presentation and responses or write to you directly. This year, we've also appointed Ben Mitchell, down the front here, as an Investor Relations manager. So we've significantly increased the accessibility of the company to investors. We didn't have that previously. So we've engaged that resource. And of course, it does allow to maximize the time and the room for people to ask questions. And as you said, there is an additional cost involved, so you could debate the benefit. But I know you're not the only one with that view. ASA has expressed that for you. I'm a member of the ASA. So I understand their position fully. But what I can commit is that we will review it again next year and every year in the future.

Stephen Mayne: You did mention a lot of other companies don't do it. I've actually nominated for close to 50 boards in the last 6 weeks and 25 companies so far have negotiated a withdrawal of the nomination by adding online questions. I didn't do it to ARB because I love you and you're a great company. I don't want to annoy you. But everyone is moving. Yes. I don't want to do that next year. I just think it would be great if you could offer it. Final general question is, as I've asked this many times of directors. So it's Andrew Stott's final AGM. It's always good for shareholders to have access to some exit reflections from to departing independent directors. So I'm wondering if Andrew could just share with us what he regards is – maybe the best 2 decisions that he thinks that ARB has made during his long journey on the Board. And if he had his time again, would he – should ARB done anything differently? Like does he have any regrets after his long experience representing us independent shareholders?

Robert Fraser: Why don't you take that offline? Put the question to Andy, I think he's quite happy to chat afterwards about that. But Andy declined to comment on that question. I can only say that he's been a tremendous resource. And I will say a few words a little bit later. His industry knowledge is exceptional and his involvement with ARB goes to committing weeks on and setting up race events is the first at the track is the last out, taking ARB banners and other things and promoting the company and the product and the industry and our contacts. So in terms of – apart from Andy Brown, who is more involved in the industry and the 4-wheel driving community than anyone on this board. So he's going to be sadly missed, but I think if Andy feels he would rather keep those reflections private. I think that's...I respect that for you.

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Stephen Mayne: So it's the first year for the sustainability report. We can hear from Paul as to what percentage of his time on the overall audit was spent on the sustainability report. You heard from – I think it was origin yesterday, about 15%. This is obviously a first in the market. And I'd be interested in hearing from you Chair as to what the board discussion was like. You're hearing some feedback that lawyers and sometimes conservative directors trying to reduce the amount of stuff going in there. So how rigorous was the debate within the Board about how extensive is the disclosure to be in the first-ever sustainability report. Do you think it's been a useful process? And again, from the auditors as to how detailed and involved the process was for the first time?

Robert Fraser: Certainly, we're aware of the requirements coming in. I think one of the things that streamline the process was the fact that we were aware that it was coming in and we were well prepared. So we hit the ground running at the beginning of last financial year. So that we – it wasn't going to be a big task to collect the data. There is people we're not going to individualize it, but put up their hand to take on extra responsibilities in getting the preparation of the report done. That came under the Audit Committee, and we get actively involved in it. So we didn't find – the process was very time-consuming, but certainly first Scope 1 and Scope 2 is relatively straightforward. I'm looking forward to hearing Paul's answer because I hope that he says it's a very large percentage of his time based on the cost to the company. But I'll ask Paul to address that.

Paul Schneider: Thank you, Stephen, for the question. I think if we look at it reflectively over the whole period, we spent about 15% of our time was focused on the sustainability report. I think it's important to call out that the required vigor around how we perform an external audit is slightly different to the requirements for limited assurance. So accordingly, 15% roughly is the time that we spent on sustainability report.

Stephen Mayne: Just a process question first. Are the Browns excluded from voting on the rem report?

Robert Fraser: Yes, they are. And have – okay, it's not on the ones that have been excluded, but yes...

Stephen Mayne: It probably wouldn't have changed the result of 41%...

Robert Fraser: It would still be a first strike, you're correct.

Stephen Mayne: That's right. It's still material. So which of the proxy advisers recommended against?

Robert Fraser: Glass Lewis, and I'm not sure about ISS. Certainly, Ownership Matters didn't and actually was also supportive, but I think it was primarily Glass Lewis.

Stephen Mayne: And it looks like Aussie Super have joined the protest. They're our biggest shareholder with over 11%. And I'm guessing that your largest shareholder has voted against that, it's not a secret ballot, so you should know that.

Robert Fraser: I wouldn't – I do know it. I wouldn't make that assumption, if I were you, but I'm also not going to as a matter of respect for individual shareholders to disclose which way they vote. But I don't think you should make assumptions about any shareholders how they vote. There's a lot of nominees on the register, there's a lot of index funds. There's a lot of overseas shareholders now who don't do anything else than just blindly follow what a bot is to the way that should be voted.

Stephen Mayne: Well, proxy advisers are not bots.

Robert Fraser: No. They're not.

Stephen Mayne: No, they're not bots. They're professional governance advisers.

Robert Fraser: Because they won't look at it effectively. They'll just – they'll run their program over it. They'll take the proxy advisers advice and whatever they don't.

Stephen Mayne: So it sounds like ISS have voted against as well because ownership matters is probably the most powerful player if they've supported us to get to 41%. It's not just going to be 1 proxy adviser. But I agree it's puzzling, not much has changed. You've gone from 99 to 58. So this is very unusual. I was a bit puzzled by your September 18 announcement of a 5% pay rise for the CEO.

Robert Fraser: It was 3.5%. It was actually below...

Stephen Mayne: 67k. Look...

Robert Fraser: It was below – it was below market benchmark...

Stephen Mayne: Why did you make that announcement? Were you like pressured by the proxy advisers to actually put it on the record of what you're doing, like that was unusual just to have a specific announcement on a tiny pay rise for the CEO?

Robert Fraser: Well, I think under the listing rules, we need to disclose any changes. I think they need to be material changes. So you could argue. But look, I mean, that's going to appear in the REM report next year. It's going to be on the public record. I don't know that there's any reason not to disclose it. I mean, in hindsight, that might not have optically been a great thing, but we're just trying to – for full disclosure, that's all.

Stephen Mayne: Yes. Well, and thanks for doing the headcount data, which you started last year, that's great because we get to see retail shareholder sentiment, not just what the big shareholders do. And just one final process issue. Next year, could you do the proxy disclosure to the ASX with your 50 slides? I don't see any reason for taking out the proxy slide from your slide pack? Allows for a more fully informed debate – fully informs the market earlier on something as material as this. And why do we never have an LTI vote? Vast majority of public companies, you have rem report and then you have the annual LTI vote. Why are we different?

Robert Fraser: Well, I'm not – I need to take that one on board, Stephen. I don't believe that it's been required in terms of the way it's been done, but let me take that on board. I think – actually, I think the answer might be because our CEO is not a director. I think that might be the technical answer, but I don't want to second guess that – Adrian is saying that's correct. And certainly, in terms of your – we'll take that on board as well, have a look at that.

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Stephen Mayne: So Roger recently retired from the AMCIL Board. So first question is, is it his intention to serve a full 3-year term here?

Robert Fraser: That is his current intention, yes.

Stephen Mayne: All right. And – there's been a material – it's very unusual to get a 13% protest vote against a founder. I can understand the arguments about "he's not independent", box tickers et cetera, but does he recognise that with the Browns owning about 6% and having 25% of the directors that the founding family are actually overrepresented on the board in relation to their shareholding. Does he recognise that? That may be an issue? And could he also – it is good for directors to speak, the shareholders have paid for a microphone in front of Roger? So would be good if he could respond to this. Has he had any direct engagement with any of the proxy advisers or the major shareholders leading into this vote?

Robert Fraser: I can answer all those questions, Stephen. In terms of the perceived over-representation, the Browns are representing no one other than shareholders. If their shareholding is 1%, it would make no difference to me whatsoever in terms of the contribution they could make to the Board. If their shareholding was 50%, I wouldn't expect then to have a third person on the board if that person not going to contribute. The both of them are there solely on merit. So I don't see the over-representation argument has been relevant at all. And the protest vote, yes, it is – it is a little unusual, but I can put it in some context. I think all of the resolutions, we are getting a protest vote today. You'll see that for the Resolution 3, when the proxies come up there, Ian Foston, I think we've got a 7% vote against a new director that is incredibly well qualified that we've selected and very fortunate to have after a global search and there's a 7% vote. So when I look at the difference between perhaps Roger and a completely new director, where you'd expect – I think there is just a protest element. But that's all I can say on that. In terms of Roger's engagement directly, the answer is no.

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Stephen Mayne: Firstly, thank you for respecting the shareholders by not appointing Ian as a casual vacancy and instead waiting for the mandate from shareholders...

Robert Fraser: That's deliberate.

Stephen Mayne: That's very unusual, and it's really good practice. So well done for that. Did we use a recruitment firm?

Robert Fraser: Yes, we did.

Stephen Mayne: Okay. And so did the board interview multiple candidates?

Robert Fraser: Yes. Great. All right. Not all of the Board, obviously, the Remuneration Committee, but the Board met Ian before the final appointment, but the recommendation was made to the Board as – we had multiple meetings.

Stephen Mayne: All right. And Ian, could you just comment on whether he knew any of our directors or KNP before enraging with the recruitment process?

Robert Fraser: Absolutely.

Ian Foston: Yes. I mean, people know my history, they can look at it, but I worked extensively at Ford in Australia. I'm a proud Australian. And I have our dealings with ARB in the past. So something which I'm very proud of is how we've partnered with ARB as a company and the products that we managed to put on to at the time, the Ford vehicles, the Rangers and the Everest that we're setting at long coast. That was something which I was a key part of. So of course, during that process, I've spoken to a number of the individuals on the board. Obviously, Andy, specifically as well with Lachlan as a CEO on some of those business dealings in the past decade.

Robert Fraser: Yes. Certainly, Stephen, there's no relationship between any of the directors I've never met Ian before. I don't think Roger had ever met Karen, Andy, Adrian, none of us had met Ian before. So there's a very thorough process. We did use that recruiter. We had over 50 or 60 people. We went to narrow that down to 30, then short list of that to a dozen and interviewed and then right through. So it was a pretty extensive process, and we're just delighted with Ian's CV. Mike?

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