Harvey Norman Still Riddled With Governance & Transparency Issues After AGM
Harvey Norman Chairman Gerry Harvey is upbeat, and he reckons there isn’t going to be a recession but after yesterday’s AGM questions are being asked as to why Harvey Norman refuses to be upfront as to what goes on at one of these meetings with observers claiming that they have real concerns over the Companies refusal to allow online interaction, there is also no record of the meeting except for media coverage.
Other retailers such as Woolworths, Coles, Myer, and the likes of the Nine and Seven Networks produce a transcript of the event so that shareholders can read what happened at the AGM.
Gerry Harvey is known as a ‘Control Freak,’ and he’s been controlling his AGMs for 50 years.
There are also claims that he has a stacked board with five executive directors.
Business Journalist Michael West Media who attended yesterday’s meeting claims that when they approached CFO and Company Secretary Chris Mentis re the availability of transcripts, he simply said that “There will be no transcript available.” Nine, AGL, ASX, ANZ, Domino’s and Lend Lease all produce transcripts of their meetings.
Mentis claims that that Harvey Norman would consider a move to a hybrid AGM which permits remote shareholders to ask questions during the meeting saying that “we will assess year on year and see what is appropriate.” That’s executive-speak for ‘no’ they claimed.
The only time that Gerry Harvey did do an online AGM was in 2020 during COVID when he was bombarded with questions many that got him rattled.
In the past he has told attendees who asked questions that he did not like to “piss off” including the Shareholders Association.
Corporate governance observers claim that the way a Harvey Norman AGM is run is poor when it comes to “shareholder accountability”.
When asked whether it’s time for him to quit as Chairman the 82-year-old retail dinosaur responded, “I’ve been the chairman of a public company since 1972, I’m the longest living and I hold the record and you’d run the risk of me losing my record.”
Michael West reported that long-term board member Ken Gunderson-Briggs, who currently serves on the remuneration committee, the audit committee and the nomination committee declined to consider running for the top spot: “As far as being the chairman of the company is concerned I don’t think I can fill the shoes of the present executive chairman in any way and certainly not in the way that he fills that position”.
Questions have also been raised about share trading at Harvey Norman.
In late 2014 Gerry Harvey personally under-wrote a heavily discounted 1-for-25 $120.7 million non-renounceable entitlement offer at $2.50 when the stock was trading at $3.71.
Today the stock is worth $4.23 resulting in Gerry Harvey pocketing millions at the expense of a majority of the company’s retail shareholders.
Proxy adviser Ownership Matters says that “when a substantial shareholder is on the board with control, there are limited restrictions on increasing their stake when capital raisings take place.”
Gerry Harvey refused to answer questions put to him, instead company director Ken Gunderson-Briggs answered that “the premise of the question is wrong and the disclosure in respect of that rights issue, or former rights issue, has been fully ventilated with the ASX and with ASIC and the chairman has nothing to add in that regard.”
The five executives on the board that include David Ackery and Chris Mentis as well as John Slack Smith.
On several occasions independent shareholders and proxy advisors have vote against their reinstatement, then along comes Gerry Harvey with his voting power to save them.
Ackery defended his role on the board claiming that due to the large amount of his personal wealth being tied up in the company shareholders should trust him to run the company profitably.
Now questions are being asked as to whether Harvey Norman staff should join a union in an effort to get pay rises,
JB Hi Fi management recently told their AGM attendees that they have no enterprise agreements, very little union membership within their staff and pay strictly award wages across the board.
When asked about whether Harvey Norman expected any union activities or was taking any action to stop union activity Mentis replied that “we want to make it clear that franchise businesses are independent they’re not part of Harvey Norman Holdings Limited, so that would be a question for our franchises.”
Workers protested outside Harvey Norman stores around the country in May 2021 in support of a pay increase for retail workers who rely on increases to award rates of pay.