AUSTRALIAN Wool innovation chairman Wal Merriman was told he should decline proxies given by grower shareholders, after he told this morning’s Senate Estimates hearing that he could hold up to half the potential votes in a board election.
Under questioning from Regional and Rural Affairs and Transport Legislation Committee chairman Barry O’Sullivan, it was revealed that progressive AWI voting results were shared with Mr Merriman, who estimated he could hold, as proxies, up to half the potential votes in an AWI director election.
Mr Merriman told the hearing that people give him their proxies.
“I haven’t rung and asked them, but people ring me and say what will I do, and I say ‘I think, Jack, Jack and Jill’
“So I say the best way, if you want, just give me your proxy.”
When asked how many proxies he held at the last AWI board election, a reluctant Mr Merriman initially hesitated and said “it’s confidential knowledge” and “it’s the shareholders’ vote.”
“I’ll have a guess, 45,000, something like that,” Mr Merriman said.
“The people give them to me.”
Senator O’Sullivan asked: “Did that not go off like a cracker night for you? There are 90,000 votes cast and 50 percent of them are cast by proxy by the chairman of the board.”
Mr Merriman said there might not be that many, “but the point is, they want me to vote for them.”
“It’s the shareholders’ vote, sir.”
“… on your own figures, you and you alone will determine who wins the free elections for the board.”
But Senator O’Sullivan said: “No Mr Merriman, right now you vote, you are capable of…”
“Mr Merriman, on your own figures, you and you alone will determine who wins the free elections for the board, if 50 percent of the ballots cast, are cast by you by proxy.”
AWI company secretary Jim Story said “a preponderance of proxies lodged appoint the chair as their proxy, a preponderance of them give specific direction to the chair on how to vote those votes.”
AWI executive director Mr McCullough then presented figures suggesting that at the last AWI election with 90,000 contested votes, Mr Merriman carried 20,000 proxies and for the previous election with 180,000 contested votes, the chairman held 30,000 proxies.
“I will say Mr Senator at the last election, Mr Merriman was up for election, so he had to absent himself and hand those proxies over to the deputy chair at the time,” Mr McCullough said.
“I’ve got to tell you, we in the political world, if you’ve got 20,000 out of 90,000, you are head and shoulders – it’s all over,” Senator O’Sullivan said.
Mr Merriman asked Senator O’Sullivan how he should get growers to stop giving him proxies.
“Mr Merriman, you need to decline them and your board needs to add to your charter, your code of conduct, that board members will not ever, in the future receive proxies to apply in a free election for a board member.”
But Mr Merriman said AWI was the same as every other company. “Are you going to stop BHP from doing it?”
“The fact that you can’t see the difference in your circumstances and corporate arrangements, concerns me,” Senator O’Sullivan said.
AWI secretary Jim Story queried whether Senator O’Sullivan was referring only to proxies received by Mr Merriman and giving him some discretion – ie undirected proxies.
But the senator said Mr Merriman had indicated that when people ring him, they seek his advice.
“I imagine the very fact that they then voluntarily provide him with the proxy it would reflect the advice the chairman has given.”
Progressive voting totals shared with AWI chairman
Mr Story confirmed that about 90,000 votes were returned in the last AWI board election of a total possible of about 1.1 million, but could not remember how many proxies were given. He also confirmed that progressive voting totals are shared with him by the registry Link Market Services.
“Yes, it comes to myself. For the most case not, I will share that with the chair from time to time.”
Senator O’Sullivan said this was where he had a “serious problem”.
“We have a progressive election and the returning officer shares the progressive results with you the client, problem number one, and now you share those progressive results with the chairman, problem number two.”
Mr Story said he did not share progressive election results with the board or the executive, but shared them with Mr Merriman “to enable an orderly meeting to be run.”
“It’s normal corporate practise, Mr chairman,” Mr Story said.
“I promise you whatever this is, this is not normal practice on a ballot for a board member’s position,” Senator O-Sullivan said.
Mr Story said he did not get information on who had voted as it was private information.
“We do not inquire into that.”
He said there was never a report compiled on the voter and their intention.
In other revelations at the Senate Estimates hearing, Mr McCullough said AWI had investigated the June genetics research focus group session, Mr Merriman answered questions on his conduct and its bearing on AWI’s reputation, and his position and philosophy in the industry as a Merino stud breeder.
More details on the AWI proxy process and other stories on the Senate hearings to come on Sheep Central.
I would like to investigate proxies given to Wal, who gives them on what basis and is anyone alive who gives him them…..let’s ask for who provides a donkey vote.
It shows the rare statements by AWI leadership that “the growers decide” are a total lie. The chairman decides. Is this China?
A pat on the back for Senator O’Sullivan for questioning the voting process for electing directors to AWI. Giving Mr Merriman proxy votes would be akin to driving some more nails in the wool grower’s coffin. Not only is he out of touch with practical wool farming, he is delusional as well, if he believes he has wool levy payers wanting him to continue in his current position.
Come on wool growers, make your vote count. Don’t cop out and give your vote as a proxy, which enables Wal Merriman and his cronies to cling to power, using every trick in the book.
It is high time that process for selection of the AWI board was returned to the principle of a skills-based board. This was a principle put in place for all statutory boards by John Kerrin when he was minister for Primary Industries in the Hawke Government. Squeaky wheels in the wool industry have seen this principle replaced with a political process. There should be an industry-controlled selection committee and the chairman should be a ministerial appointment. This will put a stop to the blokes with the biggest voices and hats getting themselves jobs on the board.
So Wal boasts to the Senate hearing that he has the votes in his back pocket, even before any of us have a chance to vote. It is simple when you think about it, all Wal needs for ongoing support is of a handful of the biggest growers in Australia … and they are not Jack, Jack and Jill. He then controls everything. No wonder the blatant arrogance.
What’s in it it for this hand full of supporters? Are they somehow enjoying the ‘honey pot’ too?
Arrogance as usual, more smoke and mirrors.