NEW South Wales wool broker and Australian Wool Innovation board candidate Don Macdonald will ask major wool growers not to give undirected voting proxies to AWI chairman Wal Merriman in the 2017 board election campaign.
The board candidate’s strategy has assumed greater importance with reports that Mr Merriman is able to get a voting progress report from AWI’s share registry, Link Market Services, before the election ballot closes on November 17.
Mr Macdonald has told Sheep Central that Mr Merriman informed him “a week and a half ago” he was not one of the three 2017 AWI election candidates the board’s nomination committee will recommend for re-election.
“He was upfront, I appreciated that.”
However, Mr Macdonald said it was not common knowledge that Mr Merriman had access as to how voting was going before the poll closed.
“Wally tells me it is common practice in corporate companies … well is this grower shareholder company exactly the same as all other companies, I don’t know?
“It just doesn’t seem right that the chairman should get access to the vote and I’ve been told it could be at least a week out.”
Sheep Central has sought confirmation of the practice from Link Market Services, but former AWI director and Ridley chairman John Keniry said he did not see any governance issues with the AWI chairman contacting the registry to see how voting was going.
“I’ve done it — when I was the chairman of Ridley I called up the registry and said how are the votes going on this particular resolution.
“I can’t see any reason why that would be a governance problem,” he said.
“What there would be an issue with, would be if he found out who had voted, because that would then give him the opportunity to ring around.”
However, Mr Keniry said if Mr Merriman asked how many votes had been cast for a specific candidate, the registry would probably tell him. This meant the chairman would know what the vote tallies were before the November annual general meeting and give him the ability to cast any undirected proxies for his candidate preferences.
“Then he knows the answer and he can work out on the back of an envelope at the meeting which people he needs to have voted for.
“When there have been companies with contested elections, I don’t see a problem with the chairman calling the registry to see how the votes are going on each resolution and where each resolution relates to one person.”
Mr Keniry said encouraging AWI shareholders to vote themselves or only giving directed proxies to the chairman was a “good campaign to run.”
“Even when McLachlan was there as chairman and since Wally has been there, there has always been a huge campaign to give undirected proxies, which I think is not appropriate.
“People should be given enough information about the (candidate’s) CVs and then make up their mind and vote.
“I would never give an undirected proxy.”
Merriman refuses to confirm pre-ballot voting check practice
Mr Merriman refused to say whether he had access to how AWI board candidate voting was going before the poll closes.
Mr Macdonald said the practice might be normal practice in the corporate world.
“But it seems to the common man, to be an unusual practice … where the chairman is in a position to know any result.”
Mr Macdonald said he had been told “don’t underestimate the amount of proxies he (Mr Merriman) can hold”.
“And so it is obviously a concern to anyone who is not one of the chosen ones, how they deal with those chairman’s proxies.
“And when you find that the chairman has access to the vote prior to the poll closing and he can then target his proxies, to me that doesn’t seem to me to be a level playing field – that’s what we are after is a level playing field.”
In the 2017 AWI election, Mr Macdonald and AWI consultant Will Wilson will vie for three board seats against current board members who are re-standing — Paul Cocking, James Morgan and Colette Garnsey.
Mr Macdonald said Mr Merriman told him, that in AWI shareholder election voting papers to go out this month, the board nomination committee will recommend that AWI consultant Will Wilson, and current board members Colette Garnsey and James Morgan be elected. This leaves Mr Macdonald and current board member Paul Cocking to run their campaigns without the backing of the board.
Mr Merriman and fellow AWI director Meredith Shiell sit on the AWI nomination committee with independent members Brian van Rooyen, Rob Ashby and Katrina Hodgkinson.
Mr Macdonald said he would be recommending that AWI shareholders elect himself, Paul Cocking and Colette Garnsey, and that wool growers choose their directors without giving proxies to Mr Merriman.
“It’s not campaigning against the chairman, it is just saying to people exercise your right to vote.”
Concern over industry division and AWI isolation
Mr Macdonald said he has a concern about the division in wool grower and stud breeder ranks about AWI’s involvement in sheep genetics programs, highlighted by Mr Merriman, a co-principal of the Merryville Merino Stud, covertly observing, without their knowledge, a research focus group of MERINOSELECT breeders guaranteed anonymity and confidentiality.
“The man in the mirror incident is obviously a culmination …. it begs the question if he (Mr Merriman) had not been caught would that division be as bad as it is now?
“Probably not, but there has still been tension out in grower land about these issues that centre around the sheep genetics debate and the traditional versus the modern (breeder),” he said.
Mr Macdonald said one of the reasons he was standing for the AWI board was the “isolation of AWI from other stakeholders in the industry” over the WEP and the AWI-Meat & Livestock Australia isues.
“This is to do with the Wool Exchange Portal, it has caused this – it has not been handled well,” he said.
Referring to current stalemate between AWI and AWEX on the provision of data to the WEP, Mr Macdonald said there has not been enough collaboration to get the exchange “over the line.”
“I am standing as a candidate primarily as a shareholder of the company (AWI) to represent shareholders’ interests.
“As a shareholder of the company, I am concerned that a lot of money is going to be wasted on this if we can’t rectify what’s happening now.
“The war of words that has happened between the chairman’s of AWEX and AWI just flowed down, right down through both organisations,” he said.
“I’m concerned because at the core of all this, wool growers need a good strong AWI and there are a lot of elements of the company that are excellent; basically it’s a well-run company,” he said.
“I feel I can add some skills that might be able to solve some of these problems.”
Mr Macdonald believes the wool industry through AWI should be presenting a more unified front.
“Particularly when we’ve got a wool market at (AWEX Eastern Market Indicator) 1550 cents, it’s 250 cents higher than it was this week last year and yet there is disunity.
“It beggars belief that when you’ve got a 17 micron indicator that is 800 cents higher than this time last year, everyone should be doing back flips.”
But Mr Macdonald said AWI had signed contracts to develop the WEP and yet did not have crucial agreements with organisations like AWEX “who they need on board to make it happen.”
“I concerns me that they go this far down, with this level of commitment and yet they have got nothing concrete with the stakeholders they need on board to make it a success.”
An AWI spokesman said he would not pre-empt what the board nomination committee recommends. Its charter can be found at https://www.wool.com/globalassets/start/about-awi/who-we-are/corporate-governance/2011_schedule_4_board_nomination_committee.pdf
The date of the AWI voting paper mail-out is aimed for early in the week commencing Monday October 23, he said.
“The report of the Board Nomination Committee will be included in the mailing materials sent out to shareholders.
“This committee is independent of the board in its operations (it has 5 members and only 2 of them are board members),” the spokesman said.
“The responsibility of the board is merely to ensure that the report of the Board Nomination Committee is sent out to all shareholders entitled to vote at the AGM.
All relevant information on the AWI election can be found at https://www.wool.com/about-awi/shareholder-information/annual-general-meetings/agm-2017/
Sheep Central will interview other AWI board candidates as they become available before the election next month.
Good luck Don, you have my full support.