Harvey Norman CEO Katie Page should be a pin-up to everyone who demands more women in the boardroom and a successful CEO full stop with Harvey Norman’s earnings more than double other corporates on the benchmark list of Australia’s top 200 companies.
Instead, a rogue group is trying to oust her!
https://www.theage.com.au/business/...ts-mistaken-reply-to-asx-20191118-p53bm1.html
Push to oust Katie Page from Harvey Norman board gets fresh support
By Elizabeth Knight
November 19, 2019
There's no question the
Harvey Norman annual meeting next week is shaping up as one of the dirtiest and most theatrical in recent corporate history.
A second big proxy firm CGI Glass Lewis is advising major shareholders in the retailer to vote against the reappointment of the company’s chief executive, Katie Page, to its board as chairman Gerry Harvey engages in a war of words against governance advisers.
Meanwhile, shareholder activist Stephen Mayne, who is offering himself for election to the Harvey Norman board, said he had received a death threat as the battle between the board and shareholders becomes explosive.
There is no suggestion that Harvey is behind this.
In addition, both Mayne and proxy adviser Ownership Matters, which supports Mayne’s candidature and was the first to recommend against Page’s re-election to the board, said they are being targeted by trolls and are fielding social media abuse.
It is unusual for a proxy firm to endorse an independent-cum-governance crusader on any board. Mayne, who regularly offers himself for election to many boards, does not normally receive the backing of proxy firms including Ownership Matters
It is also unusual for proxy firms to vote against a board member who is also the chief executive.
Given Harvey and his co-founder and wife Page together own 47.5 per cent of Harvey Norman neither of these recommendations will do anything other than place pressure on the board to lift its act on corporate governance. Neither will be successful as the election requires a vote of 50 per cent.
However, the remuneration report is a different matter. Its lower 25 per cent voting threshold means there has every chance it will be voted down for the second year in a row and that it could be followed by a move to spill the board.
But there is a split in the various proxy recommendations on both issues - the remuneration report and board elections.
ISS is recommending in favour of the remuneration report, but CGI Glass Lewis and Ownership Matters are voting against. Of more significance, the Australian Council of Superannuation Investors - which on average owns 10 per cent of every large Australian listed company - is voting against the remuneration report and in favour of a spill motion.
However, ACSI will vote in favour of Page’s election to the board and will abstain on Mayne’s nomination.
(In order to clear up one misconception, neither the proxy firms nor Mayne are suggesting Page should lose her role as chief executive.)
Ownership Matters is making a broader point that this company is in need of a big dose of independence at the board level and an even bigger dose of transparency.
So, regardless of which non-independent director’s turn it is to seek re-election, Ownership Matters would recommend against them as a matter of principle.
"Page is an executive director, Harvey Norman’s chief executive officer and the wife of founder and executive chair Gerry Harvey," it said in its report to shareholders.
"The Harvey Norman board contains two out of 10 members who are considered independent. With a lack of transparency in the company’s accounts and operations, investors should seek majority board independence and vote against all non-independent or executive director re-elections."
Likewise, no matter which individual put themselves up for election as a fresh independent blood (within reason, of course) they would have won support from Ownership Matters.
(And just by way of additional context - one of the other major proxy firms ISS is also recommending a vote in favour of appointing Mayne to the board. However, it will not vote against Page.)
CGI Glass Lewis cites related party transactions and board independence as its reasons for recommending against the re-election of Page.
ISS is also voting against two of Harvey Norman’s existing directors that are up for re-election, Kenneth Gunderson-Briggs and David Ackery but supports Page.
Ownership Matters has argued for a long time that Harvey Norman’s board is the equivalence of a governance nightmare. Other than Norman and Page, his son is also on the board. This year the company nominated its first independent director in 14 years - John Craven.
Ultimately it is a mixed bag of recommendations - but one which is both controversial and embarrassing for Gerry Harvey.
And it will shine an unflattering light on the company’s governance shortcomings.
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