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Goyder’s fight at Woodside highlights question of shareholder voice

Corporate and M&A, Shareholder Activism
Jonathan Wenig action LORES v2

In a comment article published today in the Australian Financial Review, partner Jonathan Wenig explores how the influence of intermediaries raises questions about market ‘democratisation’ and the value we place (or not) on shareholder choice.

Citing the campaign by proxy house CGI Glass Lewis against the re-election of Woodside chairman Richard Goyder at this week’s AGM, Jonathan argues that in a market as sophisticated as ours, where intermediaries are unquestionably important, their increasing power brings very real responsibility. “It begs the question of if and how the market is able to hold these intermediaries accountable. Should we regulate or can we simply allow market forces to levy accountability?

“Here we have a prominent ASX listed company, with a divided shareholder base comprising numerous large and powerful institutions, many of which will, in one form or another, be “asset managers” who exercise judgment and votes on behalf of (rather than as directed by) underlying shareholders.

“In that context, questions of “voting choice” - who gets to vote, how and which market voices hold sway – is of paramount importance.”

Jonathan reflects on the significance of a pilot program launched by multinational megaplayer BlackRock to boost shareholder voting power, whereby US retail shareholdings in the firm’s largest exchange traded funds are able to choose from a number of third-party voting policies. “If we look at the initiative through an Australian lens, we are introduced to a concept of ‘voting choice’ that is somewhat revolutionary for shareholders who hold their interests in companies through fund managers.

“While BlackRock’s initiative doesn’t represent shareholder democracy in an absolute or pure sense, it undoubtedly provides investors with more of a voice – some choice is more democratic than no choice at all.”

To read the full article, click here.

Jonathan’s article was prepared with the assistance of lawyer Anjali Bethune.

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