Paatsch and co launch new advisory firm
THE shake-up in Australia's proxy advice industry continues, with the corporate governance advocate Dean Paatsch and two former colleagues launching a venture as this year's annual meeting season hits full swing.
THE shake-up in Australia's proxy advice industry continues, with the corporate governance advocate Dean Paatsch and two former colleagues launching a venture as this year's annual meeting season hits full swing.The new firm, Ownership Matters, is headed by Mr Paatsch, Martin Lawrence and Simon Connal, all of whom previously worked at the Melbourne office of the US-owned proxy advisor Institutional Shareholder Services.It comes amid the crucial annual meeting season, made more intriguing this year with the debut of the contentious "two strikes" rule on executive pay, which can force a vote on a board spill if enough shareholders oppose a company's remuneration report two years in a row.It is the busiest time of the year for proxy advisors, who advise institutional shareholders how to direct their AGM votes on corporate governance issues such as executive pay.But Mr Paatsch said the new venture would be a year-round operation, with a service advising clients on regulatory reform matters, and a "bespoke" service applying deep scrutiny to particular companies or issues at clients' requests.He said Ownership Matters would also adopt a think-tank-like role, pursuing a "public research program" on wider corporate governance issues and market practices.Billed as "independent and Australian-focused", Ownership Matters has snared one of ISS's big clients, the Australian Council of Superannuation Investors.Mr Paatsch said it also had several other clients on its books.The move comes just days after ISS announced Daniel Smith as the new head of its Australian operations, along with a plan to shift its operations from Melbourne to Sydney early next year.ISS, along with CGI Glass Lewis, dominates the market in Australia and overseas.Mr Lawrence and Mr Connal left ISS in the middle of this year, while Mr Paatsch, who founded Proxy Australia and then sold it to ISS in 2005, left last year.The profile and influence of proxy advisors have expanded in recent years - the widespread coverage of their criticisms of global media giant News Corporation, before its annual meeting last Friday, being just one recent example.But they have also drawn criticism from some high-profile directors that they wield too much power, that they are "too influential and have become de facto decision makers", in the words of the Australian Institute of Company Directors this month."We make bullets, we don't fire them," Mr Paatsch said."It's up to our clients to use our advice in a way that they think is going to serve their interests."