Palliser Capital hits out at Rio Tinto board

Palliser Capital has vowed to continue pressing for governance reform at Rio Tinto after its shareholder resolution calling for an independent review of the miner's dual-listed company structure fell short at the group's annual general meeting.

The activist investor said its campaign had "severed a critical purpose" in exposing what it described as Rio Tinto's "anomalous and illogical" arguments against simplifying its corporate structure.

Palliser founder and chief investment officer James Smith accused Rio Tinto of launching a "fierce campaign" to block the proposal, including hiring "a vast team of costly advisors" and initially seeking to exclude Australian shareholders from voting.

"While they told shareholders a robust review would divert significant resources, they likely spent more time, money, and effort opposing the resolution than complying with it," he said.

Despite the death, Palliser said it would continue engaging with Rio shareholders and the board, arguing that the vote underscored growing frustration with the miner's governance.

The resolution was backed by proxy advisors ISS and Glass Lewis, which Palliser described as "the most trusted voices in the investment community."

"They assessed the facts presented by Rio Tinto and Palliser with an independent lens and concluded that a reasonable board would not and should not resist an independent and transparent review on this critical matter," he said.

"We're grateful to the numerous investors we engaged with and who supported our arguments throughout this process, with some of the largest and most sophisticated investors in the world voting in favour of our resolution.

"We'll continue to engage with Rio Tinto's shareholders and ensure that institutions are well informed of the pertinent issues, enabling them to actively challenge leadership rather than voting, as a default, in line with board recommendations."