Long-serving Commonwealth Bank director Andrew Mohl faces a protest vote over his re-election, as shareholders demand accountability over the money-laundering compliance scandal that has rocked the lender.
Several industry superannuation funds, including Local Government Super, Vision Super, First Super and Australian Super, are set to vote against Mr Mohl's re-election to the board, with others also opposing the remuneration report, at the bank's annual meeting on Thursday.
The protest vote comes as shareholders will also vote on a resolution pushing for a stronger stance on climate change from the banking giant. In response, chairman Catherine Livingstone is expected to tell investors CBA expects its exposure to the coal industry to continue falling over time.
Ms Livingstone will on Thursday run her first CBA annual general meeting as chair, after a tumultuous few months for the country's biggest bank, which faces allegations of a mass breach of anti-money laundering laws.
Proxy firm CGI Glass Lewis has advised investors to vote against the re-election of Mr Mohl, a non-executive director, pointing to damage to CBA's reputation caused by the money-laundering compliance scandal.
While banking sources on Wednesday expected Mr Mohl would be re-elected, and CBA would not receive a second "strike" on the remuneration report, several super funds will vote against the bank's management, after more than 50 per cent of investors last year voted against its remuneration report.
Head of sustainability at $10 billion fund Local Government Super, Bill Hartnett???, said the fund would vote against the re-election of Mr Mohl for the sake of "accountability".
"I think it's important that we show accountability," he said. The fund was impressed with Ms Livingstone's handling of the Austrac scandal so far, he said, but it wanted further detail on what CBA was doing to make sure the Austrac debacle did not happen again.
Vision Super will vote against CBA's remuneration report, and it will oppose the re-election of Mr Mohl.
"Vision Super believes voting our shares in the interests of our members is very important - we consider each issue on its merits and decide our own vote," chief executive Stephen Rowe said.
Mr Mohl has been on the board for nine years, and CBA says it is asking for him to serve one more year because of his experience in insurance, given the bank is in the process of selling its life insurance business.
Cbus said it would vote against CBA's remuneration report. Australian Super will support the remuneration report, but is opposing the re-election of Mr Mohl.
At the same time, the main proxy firms and several large industry funds, including UniSuper, First State Super and Hostplus, are set to vote with bank management and have praised Ms Livingstone's handling of the Austrac crisis.
John Pearce, chief investment officer at UniSuper, said Mr Mohl was "one of the best qualified directors on the board".
"In terms of the Austrac issue, I don't see how Catherine Livingstone could have dealt with this any more firmly or swiftly than she has," Mr Pearce said. "I don't see how it's in shareholder interests to create more instability on the board."
Since the Austrac scandal emerged, Ms Livingstone scrapped all executive short-term bonuses as a form of collective accountability and a revamp of CBA's remuneration policies.
Shareholders will also vote a resolution to "provide certainty" that the company would align itself with the goal of limiting climate change to no more than 2 degrees, and Ms Livingstone is expected to publicly acknowledge the decline in its coal lending.
The resolution, organised by environmental finance group Market Forces, is expected to be rejected by shareholders.
Market Forces executive director Julien Vincent said CBA's commentary about moving away from coal was still an important signal at a time when United Nations negotiators were meeting for climate talks in Bonn, Germany.
"This is a powerful signal from Australia's largest company that it plans to get out of coal, all the more important as it is made while negotiators meet in Bonn to thrash out the next steps on climate change action," Mr Vincent said.
