QBE Insurance's Annual General Meeting last week made it clear; shareholders are right to raise concerns about how the company manages conflicts of interest, especially when it comes to the insuring of big fossil fuel projects.
SIX entered their AGM seeking clear answers to a very reasonable question: How does the company manage conflicts of interest given their director (and now Chair) Yasmin Allen was on the board of fossil fuel company Santos while QBE Insurance was developing their own oil & gas underwriting policy?
The response from the outgoing Chairperson Mike Wilkins should raise alarm bells. Rather than respond to the questions, he merely said the question was "offensive".
Bad governance leads to bad policy. Let's not forget that it's not just groups like SIX and Australian Ethical raising these concerns.
Even conservative proxy advisers like ISS said:
"The fact that director Allen did not recuse herself from board‐level discussions about QBE's oil and gas policy while in office at oil and gas firm Santos is a valid governance concern".
AGMs are a key tool for shareholder activists like SIX to highlight potential board failures on environmental, social, and - in this case - governance issues, drawing attention of all the company’s shareholders to important problems they may have overlooked.
I was joined on Friday by a powerful group of speakers who drew climate risk into the spotlight.
Amanda Richman, Australian Ethical’s Ethical Stewardship Lead, thoroughly demonstrated how weak QBE’s policy was compared to their big Australian peers.
Professor Lesley Hughes, co-founder of the Climate Council, expertly questioned how QBE’s low-risk assessment of climate impacts on the business by 2090 don’t align with climate science.
Dimitri Lafleur, Chief Scientist at Australasian Centre for Corporate Responsibility, unpacked the flawed assumptions in QBE’s decision-making.
You can watch these speakers on the AGM webcast at 1.25.30 (me), 53.55 (Amanda), 49.23 (Professor Lesley) and 1.05.57 (Dimitri).
And check out reporting on our resolutions in Bloomberg, FS Sustainability, Net Zero Investor and Simply Wall Street. Media coverage is a valuable way of demonstrating the deep concern to a company.
SIX and Australian Ethical are now evaluating the campaign and AGM.
It’s valuable to pause after big moments, like AGMs. Our reflections will inform our next steps.
Thank you to the SIX and Australian Ethical communities for your involvement in bringing these crucial issues right up to the board. Stay tuned!
Header photo credit: Kingbob86 (Timothy) - https://www.flickr.com/photos/kingbob86/5341730273/
