Peta Credlin
Peta Credlin (Image: AAP/Mick Tsikas)

On Friday night Peta Credlin, Sky News presenter and former chief of staff to Tony Abbott, made the following statement on her program, which was then reproduced by The Daily Telegraph as part of a comment piece by Janet Albrechtsen:

A mob called Ownership Matters — a proxy firm — is trying to replace Katie Page with professional corporate agitator Stephen Mayne on the Harvey Norman board at the company AGM later this month. These proxy firms are a nasty new pest wreaking havoc on business. They invite small shareholders to assign to them their proxies, and then try to turn public company AGMs into town hall debates about climate change, gender equality, or bringing boat people to Australia.

Where do we start? Poor old Peta has no idea. She seems to have confused the proxy advisory firms Ownership Matters, CGI Glass Lewis and ISS (which advise institutional shareholders how to vote their stock at AGMs) with a combination of the Australian Shareholders’ Association (which does collect proxies from small shareholders) and the activist outfits Market Forces and the Australasian Centre for Corporate Responsibility (which does put up-climate related resolutions at AGMs).

Most of the Ownership Matters staff have never been to a public company AGM, let alone gathered proxies from small shareholders to stir up town hall debates. They’d probably lose their ASIC licence to give financial advice if they did that. Credlin owes them an apology.

The only connection between proxy advisers and activists is that the likes of Ownership Matters and ISS have to make recommendations on how shareholders should vote on activist resolutions — and 95% of the time they side with the board recommendation.

Indeed, the crew from Ownership Matters has recommended against me more than 25 times over the years. This is only the second time they recommended a vote in favour, and this is my 50th public company board tilt since 2000.

The other time was a tilt for the Centro Retail board in 2008 on a platform that they needed more independent directors, which is exactly the same situation as Harvey Norman.

If proxy advisers and institutional shareholders have been calling for more Harvey Norman independent directors for more than a decade, then it makes sense to recommend a vote for one when they come along, even if the board opposes the election.

Besides, when the board controls almost 50% of the voting stock (which was also the situation at Centro Retail), it’s a safe protest designed to send a message for Harvey Norman to appoint their own new independent directors rather than having their shareholders impose someone they don’t want on the board.

Ownership Matters principal Dean Paatsch came out swinging against the Credlin-Albrechtsen double-act today, telling The Age: “The notion that we’re activists for the fringe left is frankly a critique by the lunatic, mouth-breathing right.”

The other misrepresentation from News Corp was this suggestion that Ownership Matters is somehow trying to get me to replace Katie Page as Harvey Norman CEO. I’ve actually voted in favour of her re-election and given her credit for standing for the board when she could have used the exemption for CEOs and avoided doing this.

There are actually five candidates running for the Harvey Norman board at the November 27 AGM at the Sydney pokies venue known as the Tattersalls Club.

Ownership Matters recommended voting against the three long-serving incumbent directors: Page, executive director David Ackery and non-executive director Ken Gunderson-Briggs, an old mate of Harvey’s who chairs the audit committee.

They recommended a vote in favour of the recently appointed independent director Maurice Craven and a vote for me, as did rival firm ISS. The big news that Albrechtsen completely missed is that Ownership Matters is also recommending a second strike on the remuneration report, plus a vote in favour of spilling the entire board, something they’ve never suggested before for an ASX200 company.

Harvey is such a governance recalcitrant they have decided to go all out.

Harvey Norman spends around $370 million a year on advertising and marketing in Australia and New Zealand including more than $1 million a week with News Corp. Harvey and Page’s response on reading the Ownership Matters report was to reach out to Albrechtsen and cook up a spinning campaign that claimed political correctness was driving a push to replace a female CEO with a failed male activist. Truly!

No self-respecting business journalist at The Australian would get involved is such a laughable, advertiser-driven editorial attack, so it was left to Albrechtsen and The Australian’s NSW editor, Steve Jackson, to orchestrate the hit in the pages of The Australian on Friday. It comprised this story across the top of page 1 and a Planet Janet opinion piece across the top of page 12.

If that wasn’t enough, the full Sky after dark symphony was trotted out, with Credlin delivering a mistake-ridden editorial on Friday night before conducting a nine-minute interview with Albrechtsen.

After that, the Friday night deteriorated even further as Rita Panahi chimed in with Daisy Cousens having a swing. Even Steve’s Price’s old defamation lawyer Justin Quill got involved. 

Now for some facts. Harvey Norman has been an under-performing governance debacle for years. Harvey smoked more than $150 million on diversionary frolics into the dairy industry and even mining camps.

The board refuses to disclose the individual valuations of its claimed $2.5 billion property portfolio, which paints an arguably inaccurate picture of the financials by not consolidating the franchise operations, and has done three successive capital raisings to fund dividend payments, which deliberately diluted retail shareholders.

Only one of the 10 directors are independent and after 10 years of protest votes above 20% — against conflicted, non-independent executive directors — shareholders are entitled to look for alternatives, who shouldn’t be subjected to a bullying attack orchestrated by Harvey and News Corp just for standing up for good governance and accountability.