Australia might be a great shareholding nation, but for some strange reason the wide range of tools available for shareholder engagement are rarely deployed.

Unlike the Americans, who can’t vote against public company directors, Australians can easily remove directors but it rarely happens given the average incumbent is re-elected with 95% of the vote in favour.

Another tool is the calling of an extraordinary general meeting. Apart from the 2008 attempt by Kerry Stokes to remove the WA News directors, this tactic is rarely used, although it is encouraging to see some fund managers have called an EGM to take board control of RHG from the oppressive billionaire John Kinghorn.

If calling an EGM is seen as too disruptive and expensive, the easier option is putting up a shareholder resolution at the AGM, but this has only been used at about 10 of the 4000 AGMs put on by ASX200 companies over the past 20 years.

While Andrew Bolt and Terry McCrann keep howling at the moon with their hysterical climate-change denialism, it is amusing that another arm of the Murdoch family helped fund yesterday’s carbon-related shareholder resolution at the Woodside Petroleum AGM in Perth.

Woodside initially rejected a standard shareholder resolution calling for greater disclosure of carbon costs, so the Climate Institute, which was established in 2005 with a $10 million donation from Rupert Murdoch’s niece Eve Kantor, pursued the irresistible path of proposing the following new rule in the Woodside constitution.

43A. The business of any AGM, in addition to any other business required to be transacted at an AGM, by law or under this constitution, is to receive, consider and approve a report to be prepared by directors as a supplement to their annual directors’ report setting out descriptions (prepared at a reasonable cost and omitting proprietary information) of:

(i) The assumptions made by the Company about the path of future carbon prices, oil prices, demand for oil and regulation of greenhouse gas emissions in its assessment of new and ongoing major capital expenditure; and

(ii) The assumptions made by the Company and the Company’s auditors when assessing the extent, if any, of the impairment of Company assets regarding the path of future carbon prices and regulation of greenhouse gas emissions.

So that shareholders can make a well informed assessment of the operations of the Company and the Company’s business strategies and its prospects for future financial years.

You can tell that the Climate Institute, which boasts a powerful board including AFL CEO Andrew Demetriou, got under the skin of Woodside chairman Michael Chaney given that the notice of meeting mentions on four  separate occasions that “item 5 was proposed by a group of 109 Woodside shareholders holding 12 shares each”.

So what, Michael. The law requires at least 100 signatures from shareholders with a marketable parcel of stock worth more than $500. As of last night, 12 Woodside shares were worth $559.20.

In the US a shareholder resolution can be proposed by a single shareholder who has held $US2000 worth of shares continuously for 12 months, something which a Gilbert & Sullivan expert will do at the 2011 News Corp AGM in a repeat of the 2007 attempt to unwind the Murdoch family gerrymander.

So how did the Climate Institute go yesterday?

Despite getting an endorsement from the Australian Council of Superannuation Investors (ACSI), the two powerful global proxy advisory houses, ISS and Glass Lewis, both recommended against.

The final result was 27.33 million votes worth $1.26 billion in favour and 439.31 million worth $20.45 billion against.

That’s only 5.85% of the directed votes in favour, but if you strip out Shell’s 190.12 million shares, you had 10% of the independent votes supporting the proposal.

Ironically, Woodside argued that such disclosure would reveal sensitive commercial information yet Shell itself discloses its $US40 a tonne carbon price assumption.

Incredibly, Michael Chaney argued that to use any carbon price in a base case would be misleading to investors. At a time when shadow carbon prices are continuing to rise globally, how can using zero as a base case assumption not be misleading?

This is starting to sound like the old story about optimistic assumptions keeping the gravy train flowing. When Woodside does eventually issue the inevitable carbon-related profit warning, the fund managers will only have themselves to blame for not insisting on disclosures that could have better informed them.

Woodside has already admitted the Browse Basin project off Broome has more CO2 that anything else in its portfolio, something the Climate Institute ensured shareholders were told about in its 1000 word S249P statement that accompanied the notice of meeting.

Given that Shell recently dumped a 10% stake in Woodside to institutional investors for more than $3 billion, you would think those fund managers would want to enjoy the same insights into carbon exposures that Shell had when they exited.

Talk about fund managers shooting themselves in the foot.