LaborNET

  Ask Neale

  Tool of the Week

Corporate

The Riddles of Democracy at Telstra

Extracted from crikey.com.au

Shareholder activist Stephen Mayne explains how the big guys ran roughshod when he and trade union activists attempted to stand for the Telstra board.

	Stephen Mayne

********

The combined wisdom of the Howard Government and Telstra's spinning machine managed to produce a farcical AGM as far as corporate democracy was concerned on November 17.

The five defeated candidates were not told how they polled. Telstra chairman Bob Mansfield even refused to reveal the proxy votes at the meeting which is a requirement under the Corporations Law.

So here we have a government-stacked board - 11 of the 12 members have been appointed since the Howard Government came into office - breaching the corporations law which it administers.

Every other board that I've stood for so far has declared the proxy votes and the final votes to the shareholders at the meeting.

When I asked to be told the proxy votes chairman Bob Mansfield simply said he was complying with the relevant regulations. When I asked him what he was going to do with the open proxies granted to the chairman, he refused to say.

Four days later at the CDS Technologies AGM in Mornington, chairman Bob Mansfield happily provided the proxy votes to the meeting.

About 30 per cent of small shareholder who vote, simply sign the form and send it back in the reply paid envelope, thereby handing their votes to the chairman. This often amounts to about 20 per cent of the vote and can be crucial in determining resolutions.

When he was asked how the government intended to vote its 50.1 per cent stake, Bob claimed he had no idea, which is very difficult to believe.

Those shareholders who hung around to see the result of the poll were simply told that John Fletcher, Catherine Livingstone and Sam Chisholm had been elected for the first time and deputy chairman John Ralph had been re-elected.

It was weird that none of the hand-picked new directors bothered to turn up at the meeting when the two union candidates and Crikey all spoke up.

And it was even more strange that two of the three directors who walked the plank in September - Chris Roberts and grain grower Celia Moar - were sitting on stage with the other directors.

When I asked for explanations as to why they'd resigned, Bob Mansfield refused, saying that it was a private matter for the individuals concerned.

The mystery fifth vacancy appears to have been Steve Vizard's as he was up for re-election this year yet appears to have resigned in a great hurry, unlike the two other sacrifices.

This made my candidacy for the Telstra board somewhat redundant because I specifically stood on a platform opposing Steve Vizard because of his various conflicts of interest which had been tolerated for far too long.

Getting back to the question of how we all polled, a quick inspection of the Telstra announcement to the stock exchange late on Friday simply restated that the four government-backed candidates had been elected by poll.

No Telstra official made any contact before the meeting to advise of the voting procedures to be adopted or to advise whether candidates would be given an opportunity to speak.

And still no-one has made any contact after the meeting to advise on what the vote actually was.

Bob Mansfield made a cryptic remark before the poll that the incumbent directors received more than 95 per cent of the non-Commonwealth proxy votes. Gee, maybe Bob did know how the Commonwealth voted after all.

But Bob did not make any reference to that crucial fifth vacancy which was available for one of the five outsiders.

Did any of us receive a majority of the proxies and then get defeated by the chairman with his open proxies or by the government exercising its no vote?

Given the extraordinary secrecy one can only suspect that the government and the board have something to hide.

ASX-Perpetual have also been strangely secretive through the process. On arrival at the meeting one hour after it started I asked to see my proxy votes and it took more than an hour for an official to come up with something that made no sense whatsoever and was apparently only a representative sample of the votes.

At the Commonwealth Bank AGM an ASX-Perpetual official was able to tell me before the meeting that about 17,500 individual shareholders had voted for me and 5,500 against.

There was no such luck at Telstra.

The media really should have a look at this issue and Terry McCrann has been leading the charge on it but still no government spokesman has responded explaining why the government voted the way it did.

Despite all the secrecy, Telstra advised the ASX on Monday afternoon that the four government-backed candidates had been comfortable returned.

Setting a good precedent for how institutions should vote, the government only cast its 50.1 per cent stake during the poll, meaning they hung around and listened to the debate before registering their voting intentions.

The proxies showed Crikey finished third out of the five external candidates with 82 million votes in favour and 467.87 million against - a "yes" vote of just 15 per cent.

Union leader Len Cooper did best of the outsiders with 130.66 million in favour and 426.35 million against - a "yes" vote of 23.45 per cent.

And the eccentric Mervyn Vogt finished a long last with just 49.75 million votes in favour and 470.26 million against - a "yes" vote of just 9.5 per cent.

Even the three newcomers - former Cochlear CEO Catherine Livingstone, outgoing Brambles CEO John Fletcher and former BskyB chief Sam Chisholm - encountered some stiff opposition with "no" votes between 105 million and 106.5 million which equated to about 16 per cent.

It is very rare for a board-backed director to get less than 95 per cent so maybe this reflected the size of the field, lack of incumbency and lack of voting direction from the board.

The only incumbent up for re-election was deputy chairman John Ralph and he clearly polled better than everyone else with 630.6 million in favour and just 19.5 million against - a "yes" vote of 97 per cent.

The actual meeting itself contained some of the worst debate Crikey has ever seen at an AGM. Thank god chairman Bob Mansfield tried to limit speakers to three minutes each.

CEO Ziggy Switkowski put himself forward as the fall guy for his chairman and his favourite underling Ted Pretty.

When I listed Mansfield's string of Packer associations over the years and then expressed horror that he'd backed an $18-a-share bid for PBL early last year that valued the business at $10 billion, Ziggy said that it was him and not Bob who had brought that proposal to the board.

Then when I listed the litany of disasters that Ted Pretty had been involved in, Ziggy said that Telstra was in front overall from the various experiments and that Ted had only been involved in some of them whereas Ziggy was responsible for all of them.

Crikey is a supporter of the Zig. He's got the toughest gig in corporate Australia, is relatively underpaid and has a million forces pulling at him simultaneously.

However, he needs to forget his Ted Pretty friendship and cut his mate adrift in the interests of the company. Pretty is a lawyer and a dealmaker, yet Ziggy now has him responsible for about 70 per cent of Telstra's revenues.

Wouldn't it be better to have a career telco person with oodles of operating experience in such a pivotal position.

And as for Bob Mansfield, well he is definitely in the Howard-Packer sphere of influence but he and Ziggy appear to be getting on well so the jury is still out on him with the share price picking up somewhat after the renegotiation of the PCCW deal.

   Visit Crikey!

  View entire issue - print all of the articles!

  Issue 80 contents

»	It's Official: Union Leaders More Trusted than Bosses!
»	Reith Isolated on Workers Entitlements
»	Light for Shafted Woodlawn Miners
»	ATO Workers Stand Up to Bullying Bean-Counter
»	Schweppes Lockout Bubbles Internationally
»	Online Registration Takes Hold
»	Bush Apprentices Face Breadline
»	ALP Council Faces Workers' Wrath
»	Local Action to Back Burma Sanctions
»	WorkCover Needs First Aid Help
»	Shier Under Fire � At Your ABC
»	Social Charter Puts Heat on Howard
»	Wattyl Make 'Em Fair Dinkum?
»	International Union Aid Jobs on Offer

»	The Soapbox
»	Sport
»	Trades Hall
»	Tool Shed

»	Botsman Off Beam
»	Botsman Off Beam II
»	Fatherly Advice
»	Concerns on Fundraiser
»	Let's Be Frank about Frank!

Notice Board
- Check out the latest events

Latest Issue

View entire latest issue
- print all of the articles!

Previous Issues

Subject index

Search all issues

© 1999-2000 Labor Council of NSW

LaborNET is a resource for the labour movement provided by the Labor Council of NSW

[ Privacy Statement | Disclaimer | Credits ]

LaborNET is proudly created, designed and programmed by Social Change Online for the Labor Council of NSW