Corporate Governance

Corporate Governance News

This section on Corporate Governance provides investors with the latest topical news plus some informal comments and insights from ShareSoc’s directors and other contributors.

Round up on recent FRC and FCA developments

Our event at the FRC on 21 November, when the FRC will explain what they do and listen to members’ feedback, is a sellout and we are now operating a waiting list. Below is a roundup of recent FRC and FCA developments, to inform attendees and help guide questioning. FRC says corporate reporting could still be improved In its annual review of corporate reporting, the FRC said disclosures by large listed UK companies are generally good but detailed explanations and clarity could still ...

Johnston Press, Blancco Technology and Intercede

Companies in difficulties always make for interesting reading, and here’s a brace of them. Firstly Johnston Press (JPR), a publisher of newspapers. That includes many local ones but also the Yorkshire Post and the Scotsman who cover national business news – the latter is particularly good on the travails of those big banks registered in Scotland such as RBS and Lloyds. The company had more operating losses than revenue last year, debt is way too high and dividends have been non-existent for ...

City of London Group – exemplary transparency, exemplary culture

DISCLOSURE - I hold shares in CLIG and you should consider my comments in that light and with appropriate scepticism – DYOR! On 23rd October I attended CLIG's AGM and Investor Afternoon. These were well advertised, at convenient times and locations and open to all investors - as ShareSoc encourages all businesses to do. Roger Lawson and UKSA's Gerald Roberts joined me at the AGM, and Gerald for the Investor afternoon. A key issue which I raised at the AGM was succession planning, ...

ADVFN Results and More on Lloyds

ADVFN Plc (AFN) published their results for the year to June yesterday. I have a very small holding in the company (acquired for reasons I won’t go into). ADVFN are information providers on the stock market, primarily to private investors. Many people monitor their bulletin boards although like many such boards frequented by private investors, they are somewhat of a curate’s egg so far as serious or sophisticated investors are concerned. But they certainly have a large following – they say they ...

Rbs Snub to Chris Philp MP and Next Steps

Gavin Palmer was at the Tory Party Conference and in discussion with Chris Philp, MP, where it emerged that Chris had written three times to RBS asking Sir Howard Davies, RBS Chairman why they were objecting to our shareholder resolution for a Shareholder Committee. Regular readers will be aware that it was Chris who wrote an excellent paper covering Shareholder Committees in September 2016 which received wide publicity. See http://highpaycentre.org/files/HPC_42_WEB_amend_-_Restoring_Responsible_Ownership.pdf Despite Chris’ best efforts, RBS rebuffed his questions and refused to share their legal ...

HBOS and Lloyds Legal Case

This week sees the start of the legal case in the High Court by investors in the Lloyds TSB over the acquisition of HBOS – opening submissions are on Wednesday and it’s scheduled to run through to March next year. Anyone can attend these hearings of course but I think it will take a very patient person to sit through all of it. I have submitted written evidence on behalf of the litigants (represented by Harcus Sinclair) but it seems I ...

Guidance for UK Boards on Stakeholders

Review and commentary by Cliff Weight ICSA: The Governance Institute and The Investment Association (IA) have launched guidance to help UK company boards ensure they understand and weigh up the interests of their stakeholders when making strategic decisions. Commentary: My view is • They have recommended 10 principles. Principle number 9 is important -“The board should report to its shareholders on how it has taken the impact on key stakeholders into account when making decisions.” - The Government will introduce legislation to this effect ...

Abcam, Voting and Non-Executives

I am a long-standing holder of Abcam (ABC) and have been very happy with my investment – a compound annual return of 33% p.a. since I first purchased the shares in 2006 according to ShareScope. But the notice of this year’s AGM (to be held in Cambridge as normal) has made me unhappy for other reasons. Firstly, I tried to vote. Rather than use the paper proxy voting form (I am on the register so I get one) I thought it would ...

Dual class share structures: threat or opportunity?

I was interested to read this article in the FT today. It reports that the Hong Kong stock exchange is once more contemplating whether to permit listed companies to have dual class share structures. The exchange has considered this topic several times previously and has historically rejected it and not permitted such structures. In the UK, there isn't an absolute ban but the practice is deprecated and very few companies have such structures, Schroders (SDR/SDRC) being a notable exception. OTOH in ...

Foresight 4 VCT – Big Changes Needed at the AGM

ShareSoc recommends that shareholders vote against the re-election of Raymond Abbott and Michael Gray and against the re-appointment of KPMG. (NOTE: If you have already voted in favour, its not too late to change your vote and resend your proxies. Additional form(s) of proxy may be obtained by contacting Computershare Investor Services plc on 0870 703 6385.) BACKGROUND OF FAILURE Foresight 4 VCT has a litany of past failures in investment performance and corporate governance. It made major £30m errors in several reserves in its accounts ...

Sophos, Interquest and Government Policy

Yesterday I missed the Sophos (SOPH) AGM due to having a clashing engagement, but I noticed that in the announcement of the voting results that there were substantial votes against the Remuneration Report (29.8% against) and also high votes against most of the directors. One only needs to glance at the Remuneration Policy to see why. The maximum bonus opportunity is 200% of salary, and the maximum LTIP award is 500% of salary in normal circumstances and up to 750% in exceptional ...

Another Fat Cat Payoff at Hunting

On 7th April, Hunting announced the retirement of CEO Dennis Proctor: https://www.investegate.co.uk/hunting-plc--htg-/rns/retirement-of-dennis-proctor-as-chief-executive/201704070700088531B/ This follows a very difficult period for the company and its shareholders, as it suffers from sharp cutbacks in CAPEX by the oil & gas industry. I was shocked to read this today: https://www.investegate.co.uk/hunting-plc--htg-/rns/directorate-change-and-remuneration-disclosure/201709010700054964P/ A payment of US$1,688,350 will shortly be made to Mr Proctor which includes US$785,600 related to his service contract obligations with the balance reflecting a settlement in connection with the cessation of employment.   (in addition to which Proctor retains ...