Corporate conduct in Australia and first strike votes

The corporate reporting season and Annual General Meetings of ASX listed companies in Australia runs until November each year but usually extends up until the Christmas eve period followed swiftly by half yearly results in February. Late 2016 saw a raft of companies falling foul of their shareholders and experiencing first strike votes. This particularly affected what are known as the remuneration reports which provide information about how much Board directors and chief executive officers are paid.

Under the Corporations Act, if 25 per cent of the votes cast at two consecutive annual general meetings oppose the remuneration report, then at the second meeting the company must give shareholders the option to require the entire board to stand for re-election. What the table below (provided by the Australian Shareholders Association) shows is the disconnect between Boards and executives with their shareholders.

  

Commonwealth Bank	First strike. Ian Narev, CEO of CommBank saw his LTI grant withdrawn and 50.91% of voted stock opposed the remuneration report.
CSL	First strike. 26% voted against the remuneration report, 27.25% against the CEO’s  Long Term Incentive grant and 33.82% against the proposed rise in the fee cap for directors from $3M to $4M.
Cabcharge	46% voted against the re-election of Donald McMichael after the Board reversed his promised retirement and failed to source new directors.
LendLease	Withdrew proposed new constitution after investor rejection of proposals.
Carsales.com	First strike. 54.8% voted against the remuneration report.
Goodman Group	First strike. 39.94 voted against the remuneration report as the pay for the CEO with $18m incentive was considered too high.
Sims Group	First strike. 31.7% voted against the remuneration report and proposed constitutional changes.
News Ltd/ 21st Century Fox	First strike. 31.1% voted against the remuneration report or 63.7% if the Board directors votes are excluded.

Opera Australia 2017 season - Review - King Roger

Michael Honeyman (centre) King Roger and Lorna Gore (far left) Roxanna

This is the first time the Australian Opera has performed a Polish opera and none is more fitting than Karol Szymanowski's King Roger. Often described as rich and strange, in three Acts the Opera traces the enlightenment of Christian King Roger by a young shepherd who represents pagan principles and a devotion to hedonism. The underlying theme which Symanowski is exploring is the transformative impact of beauty on cultural orthodoxy for the shepherd's message is both enticing and destructive.

In terms of a synopsis: In Act I the Archbishop and the Deaconess demand that King Roger punish a new self-proclaimed prophet who is preaching a new, strange faith. Others call for the Shepherd's execution for blasphemy. Queen Roxanna urges to the King to summon the Shepherd to explain himself for she is drawn to his preaching of freedom, pleasure and love. In Act II the Shepherd arrives and describes his philosophy and faith of pleasure unleashing an orgiastic dance which seduces the citizens into ecstasy. In Act III the Shepherd is now in power and King Roger is on trial and wanders amongst the ruins. As night falls, the Shepherd then reappears and reveals his true identity as the god of pure pleasure and demands that all should follow him blindly.  Roger resists and as dawn breaks he feels hopeful to build a new life and escape the Shepherd.  

Karol Szymanowski (1882-1937) is widely accepted as Poland's greatest composer since Chopin and it is often thought that King Roger is actually a representation of himself, a suggestion which he never contradicted. The Opera is a synthesis of different musical forms drawn from varied cultural contexts including the Mediterranean and North Africa which Szymanowski experienced as he travelled across these regions.

The set design is imaginative and multifunctional with an enormous bust of Roger's head on stage which revolves revealing a split-level internal set design of Roger's palace apartments inside. Superb stage lighting also creates the impression that the eyes of the great head follow the cast as they move.

The capable key performers for this production were:

• Michael Honeyman as King Roger
• Lorna Gore as Roxanna
• Saimir Pirgu as The Shepherd
• James Egglestone as Edrisi
• Dominica Mathews as the Deaconess
• Gennadi Dubinsky as ther Archbishop

King Roger's theme and message still resonates in the current era as much as it did in the early 20th Century.

Film Review - Rosalie Blum

Rosalie Blum -Noemie Lvovsky

Rosalie Blum directed by Julien Rappenau is for the viewer who simply would like to see a quality, plot driven story without undue negativity, gratuitious violence or mindless action hero CGI effects. Best categorised as a romantic-mystery-comedy, the film has its moments of both hilarity and pathos yet remains firmly grounded in reality. At 96 minutes duration, its expertly crafted with the plotline progressively revealed.

The  story is evenly shared between its two main characters,Vincent (Kyan Khonjandi) and Rosalie (Noemie Lvovsky) with a small ensemble cast in support. Vincent lives a nondescript life running a small hair dressing salon in provincial France. His demanding and somewhat dotty old mother lives in the apartment above his own placing an endless array of demands on her son. It is while doing a shopping errand for his mother that Vincent sets eyes on Rosalie, the owner of a small store and he is instantly drawn to her in a form of deja vu moment. He cannot identify how this familiarity exists so he sets about carrying out clandestine surveillance of her to find a clue however, its not long before Rosalie becomes aware of this activity.  With the assistance of her niece, Aude (Alice Isaaz), her friends, Cecile (Sara Graudeau), Laura (Camille Rutherford)  and Aude's bizarre performance artist roommate,  (Philippe Rebbot) Vincent becomes the unwitting subject of some counter-watching. Is Vincent a madman, serial killer or a harmless quack is the question which Aude and friends seek to discover through a series of very funny circumstances. Vincent also finds the answer he is seeking and along the way unexpectedly finds a direction for his own life.

This is a very good art-house film and strongly recommended for its social observation and uplifting and comical moments.

Film Review - Jackie - Natalie Portman's exemplary performance

Jackie - Natalie Portman

While many film documentaries and dramatisations have canvassed the assassination of US President John F Kennedy in Dallas, Texas in 1963, few if any, have approached the subject solely from the perspective of the First Lady, Jacqueline Kennedy. This film does just that.

Directed by Pablo Larrain and written by Noah Oppenheim this biopic covers the initial few days immediately following the assassination with carefully positioned flashbacks to earlier periods in the White House to give context to Jackie's role as First Lady. Based on a long interview given to Life magazine journalist, Theodore H White at Hyanis Port, Massachusetts by Jackie Kennedy, this is no sentimental, maudlin film but one which takes the viewer directly into a front row seat, almost as a witness.

The film is not long at just 91 minutes and relies heavily on recreated historical scenes through the eyes of Jackie both in first person voiceover narrator and in direct dialogue scenes. In such a story-telling process, there is almost a complete reliance on the central character to convey the events, the emotions and the impact. This is done superbly by Natalie Portman and this film should be seen as a triumph and high point of her acting career. Her performance captures Jacqueline Kennedy's poise, elegance, voice and understated steel resolve to ensure her husband is properly honoured in death while caring for her now fatherless-children. This is no mean feat as Portman only marginally resembles the real life woman and so must rely heavily on her own acting skills to compensate and achieve audience believability.

Filmed on location (during the funeral procession scenes several blocks of Washington had to be cordoned off) for historical accuracy and with supporting key roles filled by experienced actors (Peter Skarsgaard as Robert F Kennedy, Greta Gerwig as Nancy Tuckerman, Beth Grant as Lady Bird Johnson, Billy Crudup as Theodore H White, John Carroll Lynch as President Lyndon B Johnson and John Hurt as the Priest).

This is a film which brings a close human perspective to a much documented historical event in the United States and it would be surprising if the viewer did not come away with a greater appreciation if not deeper respect for Jackie Kennedy.  

Australian business strategies - disruptive digital technology

The Australian Institute of Company Directors (AICD) completed its annual Directors Update series in the last quarter of 2016 providing an opportunity to hear what strategic priorities, challenges and forward focus, company directors should monitor in the year ahead. Of particular importance was the high level of attention paid to disruptive digital technology and what is termed the 'Fourth Industrial Revolution'  (best described as the increasing and rapid convergence of digital, biological and physical technologies).

Examples of the new technologies include:

• sensor technology and the internet of things: such as drones, satellites and home objects,
• big data and real-time mobile access to information: such as online advice and rating of health providers, wearable in health insurance,
• platform businesses which directly link providers and consumers such as Airbnb and Uber,
• cognitive computing and artificial intelligence (IA),
• automation and robotics: driverless trucks and cars,
• virtual reality (VR) technologies which use interactive computer graphics to create user perceptions of virtual worlds. A corresponding development is augmented reality (AR) technologies which can be applied through a smartphone,
• advanced machine learning (AML) which enables computers to discover insights and patterns from data using sophisticated algorithms,
• industrial analytics which use sensor data across a range of applications to improve efficiency and responsiveness.
• blockchain distributed database technology which creates the capability to record transactions between parties without third party involvement.

All of these changes however are moving faster than adjustments to the governance and oversight functions necessary to provide confidence to the wider community that sufficient safeguards exist. For example, privacy concerns and protection of personal information remains vulnerable with the new data sharing. Risk management systems currently used are poorly equipped to measure and mitigate business risks where the systems themselves are not fully understood. Related to this aspect, the level of expertise required to understand the functionality and operational impacts of the new technologies is not widely held by a large number of people. In short, these are but a few of the main concerns yet available solutions remain limited. The reliance to date, on proof-of-concept appraisals prior to adoption of a new technology is an insufficient process and Australian businesses would do well to devise strategies which encompass a greater risk evaluation framework.  

Mission to Mars - an unreachable goal for the forseeable future

Mars composite image - (c) Jet Propulsion Laboratory

Mars, the planet which has conjured many a science fiction movie and not a few novels. Seemingly close, the nearest planetary neighbour to Earth is nonetheless very distant to this planet and travel over such a large distance poses both technical challenges and extreme health risks for humans attempting the voyage.

In terms of orbit around the Sun, Mars is always 48.3 million or more kilometres away from the Earth which equates to around 140 times further than the moon. In terms of transit time, this distance would mean around 210 days to travel from the Earth to Mars depending on the best available launch window and capability in velocity based on the existing propulsion systems or those in the design stages. Once at Mars, a mission team would need to wait around 496 or so days before being able to commence a return flight to Earth.

What sort of space vehicle would be able to both propel the pay load safely to Mars and be able to sustain a flight crew during transit to the planet ? It would need to have sufficient speed to cover the distance with a size and scale to include the necessary life support functions including air and water to sustain the crew. Existing fuel burning engines would not suffice due to the amount of fuel which would need to be carried and a solar powered vehicle would be slow moving indeed. Mounting a nuclear engine on a manned space vehicle carries its own multi-level high risks.

The technology to reach Mars is not insurmountable however the physical health ramifications for astronauts may yet pose an almost impassable barrier. Existing data from Moon missions, Skylab and the International Space Station have demonstrated the punishing effect of long term exposure to weightlessness  on the human body - bones waste away at a rate of one percent of bone mass per month; fluid can collect behind eyeballs and cause blurred vision; radiation from solar flares and cosmic rays (which are high energy particles travelling at close to light speed) pose a direct threat to DNA and human brain cells. These are only the known factors as already identified with potentially many more.

So Mars travel remains a dream at the moment. NASA and private companies such as SpaceX have the intention to reach the red planet but for the now the only visitors will remain remote mobile robotic devices scanning the landscape for, as yet, undetected discoveries.

Strata at the base of Mount Sharp, Mars: (c) NASA Mars curiosity rover

                                                     

2017 - A new year but continuing and increasing challenges

2017 beckons as the end of 2016 draws near. Many of the challenging issues of 2016 will carry through into the new year in areas such as the economy, foreign affairs, terrorism, national identity and disillusionment with traditional politics. The ongoing baseline issue of the environment, climate change and energy needs will continue to pose an extraordinary and existential threat to all of the planet as it has for the past two decades.

In economic terms, the world's overall GDP movement remains patchy with small but incremental growth in the United States, continued slowing expansion in China and a flat line in Europe and Japan. South America continues to experience hard economic conditions and the glut of oil has led to falling revenues for producers in the Gulf. There is little insight into the impact of the United Kingdom exiting the European Union (Brexit) or the influence of Donald Trump in the United States until he takes office from January 2017 onwards. In many respects, it is a watching game.

In terms of foreign affairs and terrorism, the war in Syria and Iraq will progress until one side is finally victorious. The only certainty is the eventual defeat of the Islamic State/Daesh group. All other scenarios are impossible to predict as most professional military and foreign relations commentators have reported.

Traditional political parties will continue to lose support if they operate on a business-as-usual basis. Across the long standing democracies, large segments of society are dissatisfied with the responsiveness and conduct with many of the ruling elites and the political class in general. Elections in 2017 will show whether this is now an established situation or merely a short-lived transit protest. It will also be a watching game.

Wherever you are, all the best for 2017.