Risks to company directors who support voice without checking

Former National Australia chief executive Don Argus addressed Brisbane Club on fall out from the banking royal commission.

A doyen of Australian company directors, former NAB chief executive and BHP chairman, Don Argus, has warned that the leading companies who supported the “Yes” case without checking the details in the Uluru statement could trigger a “challenge” to their fiduciary duties.

And it may also be an issue at the approaching annual meetings.

A majority of ASX top 20 companies have publicly advocated an indigenous voice to Parliament including the four big banks, Qantas, Coles, Woolworths, BHP, Rio Tinto, Telstra, Transurban and Wesfarmers.

Although the government is now backtracking, when the companies announced their support they knew it was based on the Prime Minister’s undertaking that the Uluru Statement from The Heart would be embraced in full. The companies stated their support without knowing the Uluru details.

As I pointed out in last week’s commentary under the heading “Why the Uluru agenda changes the voice game” we now know the Uluru statement wants the voice body to be designed so that it “could support and promote” a treaty-making process as “a pathway to recognition of sovereignty” and “the vehicle to achieve self-determination, autonomy and self-government”.

The statement also canvases reparations based on the GDP.

While no GDP percentage is mentioned those reparations have the potential to adversely impact the Australian economy.

I also discussed how, subject to the High Court, the voice body has the power the “clog” the entire process of Australian government and that way be able to fulfil the radical aims of the Uluru statement.

Don Argus has raised his concerns about the voice.

The Argus warning to top directors comes in an email to me:

“I note your article in the Australian on Tuesday, where you point out that the Uluru Statement from the Heart is a complex document comprising 26 pages and references to another 86 pages which appears to be new revelations for your readers, and you contend that with this new information, that all Australians will have an appreciation of what the objectives that the Aboriginal and Torres Strait Islander communities believe their voice body will achieve.

“I feel quite sure that the hard working immigrants who have helped develop this country and defend its prosperity will have a say in the final outcome of any referendum.

“You also raised the issue of publicly funded Corporations and Institutions publicly supporting a Yes vote in the forthcoming referendum. This raises a couple of legitimate questions which all Boards may confront at forthcoming AGMs.

“1. Did the Board have full knowledge of the information now available in the 26 pages plus the 86 other pages supporting the referendum before consideration was made to take a public stance on an issue which is decided by all voters not just shareholders?

“2. As there will be economic consequences to a successful Yes or No vote, what impact does that have on the respective industry and in particular the financial performance of Individual entity?

If GDP is affected then the operating environment will be impacted.

“Notwithstanding the above the late SEK Hume used to remind me regularly that ‘Every Board of Directors owes its primary duty of care to the company itself. No stakeholder, (shareholder, employee, customer or any other) is entitled to preferential treatment.

“The only exception is when a company is insolvent at which point directors must regard creditors interests over other interests.

“I am not suggesting that any company will face financial difficulty with the published donation of $2m, but if the public statements of support, for any perceived political objective, adversely affects the financial performance of the Institution, then I suspect the fiduciary duties of a director will be challenged”.