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.

RBS, Akzo Nobel and Hornby

The Royal Bank of Scotland (RBS) AGM is tomorrow and it will be interesting to see what excuses the board of directors give for rejecting the requisition of a resolution to establish a Shareholder Committee. ShareSoc believes the rejection has no sound legal basis and ShareSoc directors will raise this issue at the meeting. Another similar case is that of Akzo Nobel in Holland where Elliott Advisors have been pushing the board to consider a takeover offer from US company PPG Industries. ...

Rolls-Royce – Audits Investigated and AGM

Yesterday (4/5/2017) I attended the Rolls-Royce (RR.) Annual General Meeting in Derby. In former years they used to hold the meetings in London but it’s been Nottingham and Derby...

Hornby Requisition Opposed

Investor Alexander Anton previously requisitioned a General Meeting of Hornby (HRN) to have Chairman Roger Canham removed from the board and get himself appointed as a director. Mr Anton has the support of the second largest investor in Hornby in New Pistoia, but the largest investor is Phoenix Asset Management. The long standing Chairman of Hornby, Roger Canham, is also Chairman of Phoenix which Mr Anton suggests is not a good arrangement so far as corporate governance is concerned. Hornby, the ...

RBS AGM Voting Recommendations

ShareSoc has today issued the following press release giving voting recommendations for the Annual General Meeting of the Royal Bank of Scotland (RBS): ShareSoc recommends voting against the following resolutions at the Annual General Meeting (AGM) of RBS: 2 Remuneration Policy, 3 Remuneration Report, 4 Chairman Howard Davies, 12 NED Penny Hughes and 24 General Meetings at 14 day notice. RBS have continued to resist our request for a shareholders’ resolution to be put to the AGM for the establishment of a Shareholder ...

Hard Hitting BEIS Report on Corporate Governance and Pay

The BEIS Commons Select Committee have today published a strongly worded report on Corporate Governance after its recent hearings on the subject. Here are some of the key points they make: They agree with the Prime Minister that high levels of executive pay need to be tackled "for the benefit of society as a whole". They forcefully recommend that Long Term Incentive Plans (LTIPs) should be abolished as soon as possible because they create perverse incentives and are often a way ...

FT Article on RBS and Shareholder Committees

The Financial Times have published an article under the headline "Investors fight RBS snub to shareholder committee move". It covers the battle by ShareSoc to get the Royal Bank of Scotland to accept a resolution for their AGM to appoint a Shareholder Committee. See the ShareSoc campaign web page here for more explanation of the benefits of such a Committee and how RBS are currently thwarting shareholder democracy: https://www.sharesoc.org/campaigns/rbs/. One of the supporters of this concept to improve corporate governance and reign in ...

Crest Nicholson Lose Pay Vote

Builder Crest Nicholson (CRST) lost the Remuneration Report vote at their AGM yesterday with 58% opposed (107 million votes against plus another 5 million withheld on a 74% turnout). This may be the first of a number in this year's AGM season. However they won the Remuneration Policy vote. The company expressed their disappointment on the advisory vote on the Remuneration Report and suggested it was profit before tax target for the 2017-19 LTIP. They reduced the target because they do not ...

Pay Revolts and Rolls-Royce Voting Recommendations

According to a number of press reports we seem to be heading into the AGM season with another year of pay revolts. There are also rumours that Mrs May is to proceed with introducing annual pay votes. Chris Cummings, CEO of the Investment Association, writing for the Guardian said "Too many people still feel they are not sharing this country's prosperity. Companies can either act responsibly now and shape a more responsible 21st-century corporate Britain or they can carry on as before ...

Employee Directors at Sports Direct

It seems that controversial company Sports Direct (SPD) are likely to become the first UK public company to have a worker on their board. They plan to appoint an elected "Worker's Representative" who will attend and speak at board meetings although they would not formally be appointed as a director. A spokesman for Sports Direct said: "Having explored all options we believe this is the best way to ensure the Workers' Representative is free to champion the interests of all staff. ...

AIC Response to Green Paper

The Association of Investment Companies (AIC) have published their response to the Government's Green Paper on Corporate Governance. One recommendation contained therein is that "The AIC also recommends that a detailed study to assess retail investors’ access to voting services on platforms and other nominee account services is undertaken to identify any necessary reforms". This is of course a very positive endorsement of an issue that ShareSoc has been campaigning upon for some time - see our campaign page here: Shareholder ...

FRC to Investigate Redcentric Audit

Further to ShareSoc's campaign regarding accounting irregularities and related matters at Redcentric (AIM:RCN), I am delighted to see that the FRC has launched an investigation into the audit of Redcentric's accounts by PWC: https://www.frc.org.uk/News-and-Events/FRC-Press/Press/2017/February/Investigation-in-respect-of-PricewaterhouseCoopers.aspx The FT also reports on this investigation today, coming hot on the heels of PWC's embarrassment at the Oscars ceremony: https://www.ft.com/content/4e710e1e-fcfc-11e6-8d8e-a5e3738f9ae4 This article highlights that PWC is also under investigation in relation to audits of BHS; Barclays compliance; Connaught and RSM Tenon. It has already been sanctioned in respect of ...

Press Release – Response to Green Paper on Corporate Governance

ShareSoc has today issued the following press release: How to fix the ills of the UK Corporate Governance scene? ShareSoc and UKSA have given their solutions in a response to the Government Green Paper on Corporate Governance Reform. We have emphasised that the following are the key issues: Engagement between shareholders and companies is not working. Shareholders are not exercising effective stewardship and control, and boards are failing to fulfil their fiduciary obligations to members. As a result, public trust in business is ...