The federal government is trying to screw over 7 million shareholders and we only have today to stop them.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
Once a year, at any public company's annual general meeting, shareholders can come face-to-face with members of the board to ask the hard questions. The Treasurer, Josh Frydenberg, now has a devious plan in place to make sure shareholders never get the chance to speak up, to stand up. He is consulting, very very briefly, to make permanent a temporary change we adopted for COVID-19 - online shareholder meetings.
That is a catastrophe, as witnessed by this month's Commonwealth Bank annual general meeting. What usually goes for six hours went for just under two hours. A process which usually entertains a host of questions from a diversity of shareholders was whittled down to nothingness. In the case of CBA, the rightly furious CBA staff members, plus members of the Financial Services Union, with serious questions about their enterprise bargaining agreement, were cut off after one question.
The good news is that in response to this Frydenberg swifty, the right and left have banded together to stop it - two very surprising allies in the battle to beat the Treasurer.
In the right corner. You'll remember that last year, in the run up to the federal election, Geoff Wilson, the managing director of Wilson Asset Management (WAM), went in hard against the ALP's franking credits policy.
It was amazing. He marshalled thousands of people into political action, an army of those motivated by nothing more than greed. The Greed Army won. Wilson collaborated with his cousin on the campaign: former Australian Human Rights Commissioner and current Liberal member for the seat of Goldstein and chair of the standing committee on economics, Tim Wilson.
Of course, Wilson got into a tiny bit of trouble because it was possible to harvest personal information from his "stoptheretirementtax" website, which was linked to Liberal Party fundraising invitations and to spam from WAM. The Office of the Australian Information Commissioner imposed an enforceable undertaking on the company - in other words, it was forced to destroy any of the personal information it collected.
No one plans to abolish physical sittings of parliament, nor physical court cases. This COVID-influenced move is designed to minimise both scrutiny and opposition.
Pretty sure Wilson is being more careful this time - but no less determined. He says permanently removing the in-person requirement for AGMs and adopting a virtual-only format is the wrong thing to do.
He believes it will limit access to company management for already disadvantaged retail shareholders, and won't provide a transparent or equitable opportunity for shareholders to hold company management accountable and have their questions answered.
He says there are a few lessons to be learned by others from his franking credits outing - "the significant power of a grassroots campaign combined with millions of retail investors that are regularly denied a voice in debates that affect them".
"Standing up for all retail investors and our 90,000 shareholders is incredibly important to us," he says.
And drily, he says WAM regularly "engages in public debate on issues that impact all investors and keep our shareholders informed, giving them a voice on these matters and allowing them to have their say".
He hasn't yet revealed whether he's called Tim to give him a shellacking, although he did remind me that Tim was not a member of the committee that recommended the draft legislation.
In the left corner, we have shareholder activist Stephen Mayne, journalist and former Melbourne city councillor. Mayne is ropable. I ask him about the unlikely alliance.
"Geoff is a good supporter of retail shareholders. Everyone is automatically appalled by this undemocratic reform. It is uniting everyone from left to right," he says.
As he points out, no one plans to abolish physical sittings of parliament, nor physical court cases. This COVID-influenced move is designed to minimise both scrutiny and opposition.
For shareholders, the annual general meeting is the one day of the year, a chance to eyeball and interrogate, with sandwiches a plus. Now that process and practice, shareholder democracy, is at grave risk.
"I'm stunned they have prioritised this," Mayne says.
READ MORE:
That would be instead of, for example, a federal integrity commission. Nah, that wouldn't be likely. We have to rely on independents like Helen Haines to focus on that.
Who's behind this? Mayne describes it as a directors' club - those who don't think big business should be accountable to small shareholders. He directly blames the Australian Institute of Company Directors and their legal fellow travellers. King & Wood Mallesons, for instance, has assisted in the preparation of various submissions to Treasury in favour of virtual meetings. The firm's view is that virtual meetings allow greater participation of those who are distant - that it benefits more people than it disadvantages.
And what of the way in which questions were cut short at the Commonwealth Bank AGM held last week? KWM partner Tim Bednall says: "I don't think that's unique to virtual meetings."
Mayne says there is only one way to turn this around, and that's to ensure that companies are forced to make the meetings as accessible as possible.
"The solution is actually to turn this around from a retrograde to a positive step and legislate that companies are forced to use the technology and make it mandatory to have hybrid AGMs, including the capacity to ask live written and oral questions from home," he says.
Sounds like a good idea. If you want more and better access to understand exactly what these folks are doing with your money, get on the consultation website and have your say. Since 2018, there have been a number of consultation periods of 12 days or less. Next minute, you'll only have a minute. And pray that this glorious alliance from the red corner and the blue corner will defeat the Treasurer.
- Jenna Price is an academic at the University of Technology Sydney and a regular columnist.