Next month, shareholders of our largest oil and gas company, Woodside Energy, will vote on two highly controversial and important items – the company’s climate transition strategy and the future of its chairman, Richard Goyder.
In the lead-up to the vote, it is developing the hallmarks of a political campaign, with supporters and detractors publicly furnishing their positions with hopes of garnering fresh disciples.
Counting the votes: Richard Goyder will likely survive as chairman of Woodside.
And, like political campaigns, it’s getting dirty, with environmental groups, proxy firms, and even analysts getting into brawls complete with mudslinging, accusations, and barbed exchanges.
The financial performance of Woodside has taken second place to climate agendas and a Richard Goyder popularity contest.
For Goyder, this is arguably the most important shareholder vote in his long career at the helm of numerous listed companies. For the second time in less than a year, he is under intense pressure.
He is almost certainly now the country’s highest-profile company director, thanks to chairing Qantas during a period when it fell from grace, and its directors were found wanting. He will leave the airline this year after the shareholder backlash over its treatment of customers and legal proceedings brought by the competition regulator accusing the airline of selling tickets on cancelled flights.
The financial performance of Woodside has taken second place to climate agendas and a Richard Goyer popularity contest.
While the climate transition action plan and the re-election of Goyder are two separate votes, many shareholders regard them as highly interrelated.
If there is a significant vote against the climate plan, it surely does reflect heavily on the directors who have overseen it, and particularly on the chairman who sits at the head of the board table.
But not all shareholders who take the view that Woodside has failed to develop a credible climate strategy will hold Goyder sufficiently accountable to warrant toppling him.
The election betting says he will suffer a large-ish protest vote but will comfortably make it across the line. Clearly, there are shareholders who want him to remain chair because they believe in his strong stewardship of Woodside’s financial position.
However, the odds are firming that the Woodside climate report won’t get the 50 per cent support.
The last time shareholders voted on its climate report, it came in at 51 per cent – the narrowest of victories for the company.
And even though the vote on the climate report is “advisory” and non-binding, the failure to get support will be a public relations defeat.
The bottom line is the belief that Woodside has improved since its previous climate report but not enough to meet the Paris Agreement commitments.
The Australian Centre for Corporate Responsibility (ACCR) accounts for a tiny proportion of the company’s shares, but it remains an influential lobby for action on climate.
It has stated that: “The Woodside board, chaired by Richard Goyder, has been persistently unresponsive to shareholder concerns on climate risk management and is pursuing a growth strategy that is not in shareholders’ interests”.
It further said that under the chairmanship of Goyder, the board had resisted change following major shareholder votes at the past four annual meetings.
Influential proxy adviser Glass Lewis appears to be on the same page as the ACCR. It recommended its institutional clients vote no to Woodside’s climate plan and the re-election of its chairman.
Another big proxy adviser, ISS, seems split. The arm that advises on ESG says investors focused on sustainability should vote against Goyder, but the proxy group’s main arm recommends a vote in the chairman’s favour.
Both arms of ISS united to recommend a vote against the climate action plan report.
Another of the influential proxy groups, Ownership Matters, is recommending shareholders vote in favour of the climate plan and the re-election of Goyder, while the Australian Council of Superannuation Investors, which advises the large industry funds, has thrown its support behind Goyder but against the climate action plan.
ACSI notes that Woodside is yet to make significant progress in investing in large-scale abatement or new energy products. It said it was also unclear how the company would reduce scope 1 and 2 emissions beyond 2030.
The large German-based insurer Alliance GI entered the debate this week, announcing it would vote against the Woodside climate report and Goyder’s election.
The counting continues.
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