Unpublished letter submitted to The Australian Financial Review
Threatened with a 25 per cent two-strike rule, suddenly Australia’s boards are passionate about corporate democracy. Their placard reads, “A minority of shareholders should not impose their will over the majority”, “Debate rages over ‘two-strike’ spill move”, (November 9). It’s exactly what trampled shareholders want to hear but as yet are too numb to realise.
The core complaint of abused shareholders is summarised in exactly the same placard. The majority of people with capital at risk including superannuants have no voice and no vote. Real democracy will fix it, nothing else can — it’s the answer to fair pay, board diversity, management ethics and talent.
Give shareholders a real vote on the issue that matters most — the appointment of the CEO. The non-binding vote, the two-strike rule, enforced pay caps are all absurd ideas against the obvious fair democratic solution. The problem is boards appointing the CEO. It’s a failed idea.
Expect potential CEOs, worthy of the job and superhuman pay, to assess their own value and win the CEO position in a competition for shareholder votes. Asking price should be part of the CEOs election platform.
It follows automatically from the majority rule placard that the corporate voting system must be fixed and made fair. This means superannuants get a vote, every election has an audit trail, no vote is ever lost, voting is convenient and efficient and proxies cannot be abused or cherry picked. None of this is true at present. All can be satisfied with direct online voting.
Unearned pay is a measure of greed not talent. Some of the nation’s best managers work in the non-profit sector — which leads corporates on voting reform.
Don’t let the nation’s most highly paid cherry pick the democracy debate. Hold boards to account on their democracy placard — let the majority rule.
Tags: corporate democracy, majority rule, public companies, shareholders
