We were asked to submit three documents to the RHG Board: a corporate governance disclosure indicating how we intend to deal with potential conflicts of interest; and CVs from Greg and I outlining what relevent experience we have applicable to the RHG board.
Three documents were sent across to RHG’s lawyer late last week and all three were rejected, before his client ‘has even had an opportunity to review’ them. ‘The documents go well beyond addressing the specific requirements of the ASX Corporate Governance Principles and Recommendations’, we were told, and ‘in places transgress over into electioneering – which, as you know, is not permissible under the Advance Bank case.’ I didn’t know. But now I do.
We will, he added, ‘have an opportunity to speak to [our] so-called “CVs” and otherwise promote [our] case to be elected as directors at the AGM.’ But I plan on giving you the information you need to make a decision well before that. I’ll publish our ‘so-called’ CVs to this site tomorrow. For now you can read the corporate governance disclosure below, which RHG specifically asked for, and decide for yourself whether it’s electioneering or not.
We’ve already had some concern expressed by members about us potentially ceasing coverage on RHG if we are elected to the board. We think it’s the only prudent course of action – it’s not possible to write research about a company on which we have inside information. But armed with our prior research and substantially improved communication from the company itself, you shouldn’t have too much trouble making an informed decision about the value of your shares. Comments, as always, are welcome.
Corporate Governance Disclosure
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{ 9 comments… read them below or add one }
I couldn’t see the electioneering there, and I think it’s telling of the culture of poor shareholder communication by the company when they complain about documents containing too much information!!
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Nathan Reply:
October 15th, 2009 at 5:23 pm
The reason they complained about too much information is because they would have to read something and possible engage the grey matter compared to cruising around from pointless meeting to pointless appointment doing nothing of substance. It is a shame shareholders mistake position and title with competence. Best of luck, change from within.
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The only possible “electioneering” I could see was in regard to the paragraph about holding bi-monthly meetings.
I would suggest just playing the game. It’s easy to get frustrated & angry about things like this however if you submit to their demands and include only the minimal required information (even if it seem stupid), there are other ways to reach shareholders such as this website. If people are reading the CV’s and corporate governance review then they have probably already found this website.
May I suggest taking all reasonable steps to point people towards this website where they can get as much information as possible & view the video. You could look at raising money from members to put a large ad in The Australian or AFR to point the unknown/apathetic shareholders in this direction. Lobby the media to write articles about small shareholder activism & the internet, using you as an example.
People quickly stop being lazy when there is a clear, simple direction to making more money.
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The only way I can see that as electioneering is if I was currently on the board and am becoming extremely nervous about losing my position! At the end of the day they can try every trick in the book, but as long as you continue to get your message across to shareholders they will see what a disgrace this board is.
On a related note, have any of the institutional shareholders expressed their thoughts on the matter directly to yourself or Greg??
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If that’s electioneering, I strongly recommend you guys never go into politics, because you’re not very good at it.
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It seems to me that they are just playing the hardball and they are just going to do the very minimum required by them by law, and if they can get away with it, they will find some way to comply with the letter and not the spirit of the laws.
Not a glowing description of the board. But hey, I can see their point. I mean, these guys are getting 80,000 AUD showing up to 4 meetings a year. Heck, David Coe just attended 2 meetings, a cool 40,000 per meeting.
If they are going to collect 80,000 AUD a year I would be very interested in someone who at least attended all the meetings.
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It is interesting that the shareprice has risen by about 10% since your action has commenced.
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quirinus Reply:
October 6th, 2009 at 11:15 pm
Regret my error in previous post, I should have said nearly 20% increase in share price.
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On the electioneering side, it may be the mention of the Intelligent Investor too much. I don’t know, just follow whatever they ask, with a blurb saying ‘as requested by RHG this is a cut down version of the original’ or some such.
I noticed UBS increased its stake in RHG. Have you guys spoken to UBS or other large shareholders to see their stance / views at the moment?
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Every action the board has taken continues to re-inforce why they should be replaced, another thing they are doing is making themselves look attractive to the James Hardie Board.
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Was it not possible to put in place “chinese walls” or the like to still allow II to cover RHG? For instance, other analysts take on responsibility for reporting on RHG and there are strict and reviewed guidelines for ensuring that there is no involvement from Steve or Greg in compiling the reviews? I know this area is fraught with risks, but just a suggestion!
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