4 Years of Governance Abuse by Harry Boon

Posted March 12, 2012                                              Twitter: @PaperlinXsuX

Here are the sordid facts. Warning - this may offend some readers.


If this disgusts you as much as it disgusts me, be sure to read about Toby Marchant - coming very soon.

If you read Question 9 on page 10 here, I ask why Harry Boon has violated Board policy requiring non-executive directors to acquire shares in the Company. 

This concept is generally called ‘alignment of interests’ by non-executive directors.

Over three years and 10 months Harry Boon has received fees from PaperlinX of $626,248, incl superannuation, comprising:

2007/08	2 months	$ 21,676
2008/09	12 months	$136,250
2009/10	12 months	$141,700
2010/11	12 months	$140,792
2011/12  (est)	8 months	$185,830
		$626,248

Apart from the ‘obligatory’ 6,000 shares bought under the entitlement offer to all shareholders in October 2008, Harry Boon has not voluntarily bought one share in PaperlinX since May 2008. 

Forgetting about governance, this is how a parasite behaves.

Key points:

1.    Harry Boon hasn’t bought one share in nearly four years which is a blatant breach of Board policy.

2.    This period covers five financial years; meaning that in five financial years his co-directors have condoned his blatant breach of policy.

3.    In 2011 the Governance Committee met three times. By March 2012, you’d reasonably expect it would have met at least twice.

4.    Here are all the directors who’ve been members of the Governance committee between 1 July 2010 and 12 March 2012, with their actual attendances in 2011 and reasonable estimated attendances in 2012.

The table below covers only the recent history of 20 months of Harry Boon’s 46 months of directorship at PaperlinX.

Director	Meetings 2011	Estimated 2012	Est Totals 20 months
D E Meiklejohn	3	0	3
H Boon	3	2	5
M L Cattermole	1	2	3
A J Clarke		2	2
J W Hall	3	0	3
M J McConnell		2	2
L J Yelland	3	0	3
BJ Jackson	2	0	2
	15	8	23

Eight intelligent independently thinking persons of good repute all agreed that:

“The policy of the Board has been that each Non-executive Director increases their shareholding in the Company progressively so that their holding is, over a period of time, at least equal in value to one year’s fees.

However, the Board recognises that this is not currently being met due to periods of lock-out and share price volatility”.

Not one of them, on any occasion, had the guts to stand up and force the Governance Committee to do its job. What a farce.

People of integrity resign over matters like this.

Key points

1.    They admit it. What a disgraceful exhibition of arrogance with all eight directors accepting this state of affairs;

2.    Clearly independent directors are incapable of independent thought;

3.    “Lock-out” is a red herring, every listed company has lock-outs, every year;

4.    The word “current” covers three years and 10 months for Harry Boon;

5.    The share market hasn’t been volatile but the price of PPX has, because of ….the Board;

6.    What about the five month period since October 1, 2011. Has a trading range of 6.5 – 10.5¢ been unsuitable too?

7.    Could the Board please tell us when it considers would be a suitable time to comply with its own policy?

Here is a simple solution.

And it doesn’t require a Strategic Review, because it has been in place at Ansell since 2002. 

Did Messrs Boon and McConnell forget that. 

Balderdash.

Embrace the concept of mandatory non-executive directors’ equity alignment as proposed in Q14 on page 17 here.  

The Company simply instructs a nominated broker to buy the prescribed quantity each month, on behalf of all non-executive directors. This avoids any alleged problems stated by the Board, which are paltry excuses, not reasons.