Taking ownership in a new patch
THE shake-up in Australia's proxy advice industry continues, with high-profile corporate governance advocate Dean Paatsch along with two former colleagues launching a venture as this year's annual meeting season goes into full swing.
THE shake-up in Australia's proxy advice industry continues, with high-profile corporate governance advocate Dean Paatsch along with two former colleagues launching a venture as this year's annual meeting season goes into full swing.The Melbourne-based firm, Ownership Matters, is fronted by Mr Paatsch, Martin Lawrence and Simon Connal, all of whom previously worked at the Melbourne office of US-owned proxy adviser Institutional Shareholder Services.It comes amid the crucial AGM 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 advisers, who advise institutional shareholders how to direct their AGM votes on corporate governance issues such as executive pay.But Mr Paatsch said the 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 corporate governance issues and market practices. It has snared one of ISS's major clients, the Australian Council of Superannuation Investors, and had several other clients, he said.The profile and influence of proxy advisers has expanded in recent years, but they have drawn criticism from some directors that they wield too much power"We make bullets, we don't fire them," Mr Paatsch said. "It is up to our clients to use our advice in a way that they think is going to serve their interests."