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.

ISS announce pay issues survey results

This article represents the view of its author and not necessarily those of ShareSoc The issue of skin  in the game and executive pay and how this impacts future share price (and dividends) performance is a crucial one. My favourite quote is from Charlie Munger "you show me the incentives and I will show you the behaviours". So when leading proxy advisor firm ISS announce their plans for next year, it is well worth looking at them. Please note these are their US ...

Daily Mail, 26 August 2021, Fury at £100m bonus for the Sports Direct prince

Mike Ashley does it again: stirring up controversy over a proposed bonus scheme for his future son-in-law. ShareSoc director (and former remuneration consultant) Cliff Weight is quoted in this article in the Daily Mail: Cliff Weight, of small shareholders campaign group Sharesoc, also questioned why Murray was worth his enormous pay package. He raised concerns that Ashley would be able to ram the proposal through at an annual general meeting next month even if other investors resist. 'This is clearly a case of a 60 ...

ShareSoc Patron Lord Lee Parliamentary Question about Bacanora take-over

The background is that ShareSoc was approached by the Bacanora Lithium Shareholder Action Group which is being run by Dee Patel who asked for ShareSoc’s assistance. We have helped them in explaining some key issues in how to run a campaign, how to obtain the shareholder register, problems with voting nominee shares, etc. We also thought whether a takeover would be in the UK public interest issue. We drew this to the attention of ShareSoc Patron Lord Lee, who has now tabled ...

Activists set their sights on underperforming AIM boards

ShareSoc Member Barry Gamble has contributed this article. A version of this first appeared in Board Agenda magazine. Although not exactly an everyday event, it is anything but rare these days for boards to find themselves under attack from activist shareholders. Although not exactly an everyday event, it is anything but rare these days for boards to find themselves under attack from activist shareholders. Following a period of corporate underperformance which becomes reflected in a weak or falling share price, shareholders may decide to ...

Bacanora “offer” by Ganfeng

By Cliff Weight. Please note these are my personal views and do not necessarily represent ShareSoc's views. I have never owned BCN shares, but am considering buying. Bacanora is subject to a possible offer from Chinese firm Ganfeng at 67.5p. The Takeover panel have issued a put up or shut up notice. A shareholder action group has been formed, with 400 investors who collectively own 7% of the shares. To join click here https://savebacanora.com/blog/ They also have an active WhatsApp group. The background ...

Scottish Investment Trust Reviewing Management Arrangements

I wrote about the Scottish Investment Trust (SCIN) back in February and commented negatively on its underperformance in recent years. Their investment style has been based on a contrarian approach, i.e. picking cheap stocks that look undervalued but which might recover. The article included this comment: “It would appear that they adopted the new investment style five years ago which might be identified as when under-performance took off. If an investment strategy does not work, how long should you persist with ...

Daily Mail, 2 June 2021, Bacanora takeover “offer” by Chinese company Ganfeng

https://www.thisismoney.co.uk/money/markets/article-9641119/Backlash-sale-lithium-Chinese-predator.html  reports that: Cliff Weight, director of shareholders champion ShareSoc, said: 'When foreign joint ventures are listed on the London Stock Exchange, it is very difficult for the rights of minority shareholders to be protected. 'Companies such as Bacanora need to be much more transparent, so it is easier for investors to understand the options and warrants that JV (joint venture) partners have. It looks like the Chinese are buying lithium assets on the cheap.' .

Investment Trust Discount Reduction – The SEC example

by ShareSoc Director Cliff Weight. These are my views and not necessarily those of ShareSoc. Readers may recall my blog in Oct 2020 about investment trusts discounts and what to do about them https://www.sharesoc.org/blog/collective-investments/investment-trust-discounts-what-to-do-about-them-and-sec-example/ On Friday 28 May 2021,  SEC announced their new plan to help reduce their discount, https://www.londonstockexchange.com/news-article/SEC/contingent-tender-offers/14995537 : 2022 Contingent Tender The Board has determined to put in place a contingent tender offer in 2022, should the ordinary shares trade at a wider than average discount of 8 per cent. over the ...

Sunday Telegraph, 30 May, Leonardo Governance Concerns

https://www.telegraph.co.uk/business/2021/05/30/minnow-activist-going-battle-defence-giant-leonardo/ quotes ShareSoc saying a CEO in the UK would step aside until the investigation concluded.

Laggard Unanswered Questions at Eleco

I received an unhelpful response to a question today (19th May) from Eleco (ELCO). I have been a shareholder for some time in this construction software company. The company announced on the 26th of April that it had received a requisition notice that covered resolutions to reappoint two directors, that all directors stand for re-election at future AGMs and that the remuneration committee report be approved. It was certainly unusual that such resolutions were not on the AGM agenda on the 6th ...