#ownershipmatters

ESG Blacklisted portfolio

ESG (Environment, Social Responsibility & Governance) blacklisted stocks. We all know deep in our hearts that vices are far more fun than virtues. Real Coke tastes better than Diet Coke. Full cream is better than skim. McDonald’s fries are tastier than mashed potato. CM made this point in yesterday’s piece on the irresponsibility of socially responsible investing for building a retirement nest-egg given the long term underperformance.

When all of this politically correct ESG investing meets a recession, these oversold anti-ESG darlings, many with gobs of free cash will look like total bargains. Suffice to say in a downturn, vices tend to be what people resort to.

All CM cares about is the G in ESG. Governance is a must for investing. E & S are merely subjective views which don’t automatically convert to shareholder value. Good governance goes without saying.

So perish the thought that CEOs, like Harvey Norman’s Katie Page are being attacked by the likes of Ownership Matters which thinks putting in a shareholder activist who has failed 49 times out of 49 to be appointed to ASX listed boards is a better bet? As Janet Albrechtsen of The Australian wrote,

A copy of the report obtained by The Australian reveals Ownership Matters has recommended that Stephen Mayne be elected to the board of the retailer, even though the 50-year-old has no corporate experience in retail or property, no corporate board experience and no corporate management experience…Harvey Norman has a market capitalisation of $5.2bn, and shares in the retailer have gained more than 32 per cent over the past year, outperforming the 16.4 per cent gain in the benchmark S&P/ASX 200 over the same period…The advice sent out on Monday has baffled Ms Page’s husband, the business’s billionaire co-founder Gerry Harvey, who remains its largest shareholder, retaining ­direct ownership of almost a third of the company. “I have been on a public company board as chairman since 1972, and I have never seen anything as bizarre as the fact that the best ­retail executive in Australia is to be replaced by a ratbag called ­Stephen Mayne who has been a proven failure … every time he’s run for a board seat,” Harvey said.