By Andrew Woods | Source: AWI, AWEX, ICS
The shareholders of Australian Wool Innovation (AWI) will vote on three board vacancies at the upcoming Annual General Meeting on November 22. There are eight nominations for the three positions with the Board Nomination Committee recommending four of the eight nominations. This article takes a look at the voter turnout for the 2017 election (the latest election where data has been published).
Figure 1 shows the annual wool tax collected from 2001-02 onwards, with an estimate made for 2018-19, along with the calculated gross wool proceeds. The wool tax is shown on the left hand scale and the gross proceeds on the right hand scale.
The AWI constitution (View here) states that a vote is given for every $100 of wool tax is paid on a rolling three year period. A minimum of $100 wool levy must have been paid in the previous three years to qualify as an AWI shareholder (not so hard with the prices paid in recent years). Therefore the number of votes that can be potentially cast is determined by the wool tax paid in the previous three years which is determined by the gross value of wool sold.
The proportion of votes cast of the potential total which could be cast is less than half. Figure 2 outlines the key proportions of the 2017 election. As of mid-2017 there were 55,342 wool levy payers on the books. Of the levy payers, some 41% (22,474) were registered shareholders of AWI and therefore eligible to vote in the director elections. It would be interesting to know what proportion of potential votes these 22,474 shareholders represented.
In 2017, some 680,786 votes were cast which represents around 37% of potential votes. In effect a little over one third of potential votes were cast in 2017, leaving close to two thirds of potential votes unused. The 37% of potential votes cast is close to the 41% of levy payers registered as shareholders, suggesting shareholders in the main care enough to vote. In turn this suggests the 59% of levy payers not registered as shareholders hold the unused votes.
As of January, AWI show a large increase in wool levy payers of 6,399 (to 61,741) but a decrease in AWI shareholders of 759 (to 21,715) (View here). This is not a good portent of increased participation in the upcoming director election.
A minority of wool growers determine the outcome of AWI director elections. Engagement and participation by a plurality of voters is generally viewed as a healthy base for, in this case, an industry. Engagement, in this case, can be improved by a higher rate of shareholders in AWI and voting for directorships on the AWI board. The only cost for eligible wool levy payers is time.
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