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.

Do Spivvy PE Funds IPO Their Investments at Inflated Prices? – and HM Treasury Consultation UK Listings Review

The AA 86% share price decline, coming on top of the Saga and Aston Martin makes me wonder if PE firms and others are exploiting those retail investors willing to buy into a fashionable story. I have to admit to losing money on Saga, whose share price is down 90% from its 2016 high. My mother-in-law was a huge fan of Saga and she gave me a present of Saga membership when I was 50, so when they were floated, I and ...
Post Date: November 24, 2020 Read more

(Nearly) 20% Vote Against Strategic Equity Capital (SEC) AGM Resolution

19.25% of votes cast were against the continuation of SEC, 13.8% and 12.9% respectively were against the reappointments of SEC Chairman Richard Hills and Richard Locke as director. See https://www.strategicequitycapital.com/sites/default/files/proxy-voting-results-2020_0.pdf The RNS announced but did not mention the actual votes cast. Strategic Equity Capital PLC announces that at the Annual General Meeting held on 11 November 2020 all 14 resolutions proposed were duly passed. Although the ordinary resolution for the continuation of the Company was passed comfortably, the Directors are cognisant of the fact that ...
Post Date: November 14, 2020 Read more

Chrysalis – Vote NO at 26 November General Meeting

Shareholders are excluded from this GM and there is no pre-meeting webinar to discuss these highly contentious proposals to wind up the VCT and distribute any monies raised (less administration fees, including payments to the failing fund manager and some directors). Several members of the ShareSoc VCT Investor Group (including Tim Grattan, Mark Lauber, Roger Lawson and myself) met on 10 Nov to discuss Chrysalis' plans. Our conclusion was that shareholders should vote against these proposals for the following reasons: Chrysalis is ...
Post Date: November 11, 2020 Read more

Is the FRC doing a good job?

By Cliff Weight, Director, ShareSoc. I think the FRC is doing a much better job. The record fine for Deloitte re Autonomy, (see Compliance Week: FRC fines Deloitte record $19.4M for Autonomy audit failures ) and the fines at Redcentric and Redcentric's auditors, and the prosecutions of former Redcentric directors in Southwark Crown Court are further evidence that things are changing. As is the transitioning from FRC into ARGA. But don't take my word for it. Come to the FRC events we have organised ...
Post Date: November 6, 2020 Read more

Changing auditors’ responsibility for detecting fraud

by Mohammed Amin MBE FRSA MA FCA AMCT CTA (Fellow). This article was first published in UKSA’s Newsletter, The Private Investor, and is reproduced with the author’s permission. The Expectations Gap After almost every major corporate reporting failure, arguments arise about the "expectations gap". This is the gap between what shareholders, creditors, employees and journalists think that auditors should be doing, and what auditors consider they are actually required to do. This expectations gap is particularly acute in cases where there has been fraud. The ...
Post Date: October 31, 2020 Read more

Investment Trust Discounts, What To Do About Them and SEC Example

In this article, I argue that discounts are bad for those invested in a trust, and the Board of the investment trust should look to reduce any discount. However, for those thinking of investing in the trust the discount might be an opportunity. The question is, how real is that opportunity or is it just a 'value trap'? We look at why discounts can arise and the measures that can be taken to eliminate them or even move the trust to a ...
Post Date: October 17, 2020 Read more

Pre-Emption Group (PEG) extends the easing of its issuance guidelines

Cliff Weight, Director, ShareSoc gives his personal views below which may not necessarily reflect ShareSoc's view. UK-listed companies hit by Covid-19 are being given an additional lifeline as the Pre-Emption Group (PEG) extends the easing of its issuance guidelines, allowing more share capital to be raised from shareholders. The PEG, the affiliate of the Financial Reporting Council that provides guidance on fundraisings and rights issues, has confirmed that the additional flexibilities put in place at the height of the pandemic will be extended ...
Post Date: September 15, 2020 Read more

Lessons From a Failed Investment

This is a premium article, available to ShareSoc full members and SIGnet members. Recent troubles at the AA (AA.) and Petropavlovsk (POG) brought to mind another problematic investment that I am more familiar with and which shares some characteristics of those companies. That investment is Gulf Marine Services (GMS). IPOs by Private Equity Vendors Like the AA, GMS was floated by its original private equity owners, with a premium listing on the LSE main market, in March 2014. GMS is a relatively straightforward business: ...
Post Date: August 24, 2020 Read more

Electronic AGMs and Voting

Several companies in which I hold shares are proposing to adopt new Articles of Association at their Annual General Meetings. These typically are amended to enable the holding of “virtual”, i.e. electronic ones, or “hybrid” meetings where a physical venue (or multiple ones) are also used. They can do that legally at present under the emergency regulations put in place by the Government but they are clearly anticipating a more common use of such capabilities now that everyone is more practised ...
Post Date: June 25, 2020 Read more

The Ideal Board – Some Tips from First Flight

Chris Spencer-Phillips, Managing Director of First Flight Non-Executive and ShareSoc Director has written the attached useful article describing attributes of the "Ideal Board". As well as for company boards, we think it will be of interest to our members. the-ideal-board-march-2020
Post Date: May 31, 2020 Read more