Australia: ABB Grain Ltd announced on February 10 that a resolution to change ABB’s constitution to simplify the voting system for director candidates has been put forth by ABB’s directors to shareholders, to consider for the upcoming annual general meeting.

The change would see the existing ‘exhaustive preferential’ system of election voting replaced with a ‘first past the post’ system, where the candidates that score the most primary votes are elected without any allocation of ‘preference’ votes.

In the current method, if a voter’s first preference candidate scores the least number of first preference votes the votes are re-allocated to the voter’s second preference. This is repeated until the relevant number of candidates remain unexcluded, or if a candidate receives more than 50% of all first preference votes, in which case is elected.

ABB’s directors believe that the ‘first past the post’ system is a simpler method to understand and provides a more transparent method of voting. By using the this system the outcome of a vote is resolved more quickly than by the current system in place.

The ‘first past the post’ method is used by most publicly listed companies, and was the voting system in place for director elections of United Grower Holdings prior to its merger with ABB and AusBulk. This system ensures that the candidate/s with the most votes are elected to the board. By using the exhaustive preferential system, the method in which votes are tallied means the candidate/s who receive the most first preference votes are not necessarily elected, but rather the candidate/s that are least favoured are ruled out until the required number of candidates are left (unless a candidate receives over 50% of first preference votes, in which case they are elected).
The proposed system means that shareholders do not need to cast a vote for every candidate – only for the amount of positions available. In contrast, the current system has shareholders expressing a preference for each candidate, regardless of whether or not a shareholder wishes a candidate to hold position on the board.

Both A and B-Class shareholders are required to vote on this amendment, and the variation and/or abrogration of shareholder rights attached to the amendment must also be passed in separate A and B-Class shareholder meetings for the Constitution change to become effective. A 75% majority of votes casts is required at all meetings for the change to become effective.

ABB’s directors unanimously recommend that shareholders vote in favour of the resolution proposed.

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