It's a strange feeling losing a vote you were never going to win. In hindsight, overcoming the incumbent RHG board's 25% stake was impossible - only 60% of shares were voted, so they started with 42% of the votes cast.
It's also a worry when you can't get a director with the record of David Coe (of Allco fame) removed from a board.
But Thursday's annual meeting of RHG Group (formerly RAMS Home Loans) was still a resounding success. My business partner and I were standing for election (against the will of the incumbent directors) and also aiming to have David Coe removed from the board (he enjoyed the backing of the current directors).
I was quite chuffed with the 23.65% of votes cast for my election. Shareholders owning some $35m worth of shares voted for my election and I was honoured to be considered a suitable representative by such a large number of people.
My business partner, Steven Johnson, garnered even more support. He scored a ''for'' mark from 30.31% of votes cast, from shareholders with an ownership of $45m worth of stock.
Our campaign had an even larger impact again when it came to the re-election of David Coe. In terms of votes cast, 32.95% of votes were cast against him; an incredible dissenting vote against a candidate with the full backing of the board.
An even more revealing story unfolds if we consider the will of the shareholders excluding the CEO and current board members (incorporating chairman John Kinghorn's son, Geoffrey, who is the company's largest shareholder). The votes from these sources total 83.3m.
If we exclude those votes cast by board members or those close to them, David Coe only received 41.6m votes from 'outside' shareholders, well below the 61.4m votes cast against him. And the vote for Steven Johnson to be elected to the board was almost exactly 50/50 on this basis.
Steven and I consider this a remarkable triumph and the board's reputation is now on the line. Will they listen to their shareholders and consider the spirit of the message delivered today, or will they seek solace in the letter of the law and completely ignore this mandate for change?
Given the dismissive treatment of shareholders at today's meeting, we don't hold much hope. But we're prepared to do more and we've shown how powerful small shareholders can be if we overcome apathy and band together (see www.rhgshareholders.com). The internet gives us a mechanism to do exactly that, and today could herald a new era when it comes to power for small shareholders.
This article contains general investment advice only (under AFSL 282288).
Greg Hoffman is research director of The Intelligent Investor which provides independent advice to sharemarket investors. BusinessDay readers can enjoy a free trial offer at The Intelligent Investor website.
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