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Fenner AGM Requisition. Why Is It Not a Good Idea?

Fenner Plc (FENR) are the subject of a requisition of a resolution to appoint another director at their forthcoming Annual General Meeting on 11th January. ShareSoc is particularly interested in requisitioned resolutions at present because we are trying to get one added to the Royal Bank of Scotland AGM (see

In the case of Fenner, activist Swiss investor Teleios Capital Partners have put forward the requisition, with the support of a number of other investors. Teleios hold over 5% and have been investors for a couple of years. The requisitioned resolution nominates Michael E. Ducey as a new independent non-executive director who appears to be very experienced from an examination of his c.v. and has relevant industry experience, unlike much of the existing board of directors.

The board of Fenner, led by Chairperson Vanda Murray, promptly opposed the requisition saying that “the Board does not believe Mr. Ducey would be additive in terms of skills, experience and background and the Board does not consider him to be independent of the shareholder nominating him”. Teleios deny the latter view, saying they had no previous relationship with Mr Ducey.

To remind readers, nominating a director does not mean they act in your interests. They legally can only take the interests of the company into account.

Fenner also say that the search for a new CEO has been materially disrupted by “the current shareholder activity”, but it is not at all clear why the appointment of a new non-executive would create such difficulties.

This does not seem to be a dispute about strategy or operations at the company. Simply that they consider only directors who have gone through their formal recruitment process should be considered, i.e. they would oppose any requisition from a shareholder to appoint someone whatever the size of their stake. It would seem they do not accept that shareholders should ultimately dictate who runs the company that they own. Shareholder democracy should not be overruled by corporate governance niceties however much one believes in a proper recruitment process for non-executive directors.

The Board’s reaction is surely unreasonable and likely to result in a costly battle, when the addition of another director with relevant skills and experience could hardly do any harm. Bearing in mind the recent financial history of Fenner, who operate in areas affected by the slump in mining and the oil/gas sectors, it does not seem a sensible time to pick a fight with some of their larger investors.

At the time of writing I have been unable to contact anyone at Fenner for comment. It seems the Christmas holiday has already started. But investors in this company should probably support the election of Mr Ducey unless the Fenner board come up with better arguments to oppose it.

Postscript: It did not take long for Fenner to reconsider this matter. On the 28th December the company announced that they had decided it was in the best interests of the company and its shareholders to support the appointment of Mr Ducey as a non-executive director. A wise decision after all.

Roger Lawson

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