Here’s something that may surprise a few people. We genuinely find what Tim Martin has to say about corporate governance worth listening to (personal attacks aside). You can’t work in this field for as long as we have without recognising some of the limitations of the ways of looking at companies through a governance framework. And criticisms of our approach obviously have more weight when they come from those who have created successful businesses that continue to do well. We also value having contrarian voices in the market. We would rather that business leaders speak out than give into a consensus that they don’t reallyRead More →

It’s that time again when the battle lines are drawn, opposing camps martial their arguments against each other and people are forced to choose who gets their vote. We’re talking, of course, about voting in pooled funds. Last week saw the Association of Member Nominated Trustees (AMNT) reiterate its call for this issue to be tackled by regulators. We wholeheartedly agree. The status quo is a corporate governance rotten borough. An unrepresentative electorate commands the vast bulk of the voting power. It’s time for reform. We know from our own analysis of both manager voting and clients’ ESG policies that there can be huge differencesRead More →

It’s over eight years since the revelation that the News of the World had been involved in hacking the phone of murdered schoolgirl Milly Dowler. That news set off a chain reaction that saw the newspaper close, numerous journalists arrested, Rupert and James Murdoch summoned to face a grilling in parliament, News Corp’s bid for BSkyB pulled (and the opportunity ultimately lost forever), senior police offers resign and the Leveson Inquiry launched (if not completed). As the fallout spread, not only News Corp started racking up multi-million costs, but other media groups including Trinity Mirror (now Reach PLC) caught up. The scandal revealed that someRead More →

The second part of this week’s Panorama investigation into the Woodford scandal focused on Capital Group fund manager Mark Denning and a fund that appears to have taken positions in some companies in which Capital was also an investor. Denning has left Capital, but has strenuously denied any wrong-doing. The fund named by Panorama as being at the centre of the trades it questioned is Morebath. A quick trawl of filings shows that Morebath was indeed an investor alongside Capital in Aus-listed medical firm Mesoblast and Bollywood film producer Eros. PIRC has also found that Morebath took some positions that were big enough to triggerRead More →

If you’ve been around in corporate governance long enough, you will remember the endless rows we used to have with the asset management industry about disclosure of voting records. In these days when analyses of how managers vote on issues ranging from climate change to executive pay are regularly published, it’s easy to forget what a fight they put up to avoid transparency. There are still a handful of holdouts in the UK who refuse to make their records public, but by and large the bigger managers play ball. The timeliness of the disclosures managers make is another question. Some disclose their votes on aRead More →

Anyone who has been reading the Financial Times over the past year or two will have noticed thatthe Pink ’Un has started to get the jitters about the future of capitalism. The rise of populists on Left and Right, political shocks likes Brexit and Trump’s election, and public antipathy towards business have led to many a hand-wringing opinion piece. For us, hands down the most interesting and significant intervention has come from Leo Strine, outgoing Chief Justice of the Delaware Supreme Court. Noting that in recent decades workers have failed to benefit relative to investors from the increasing wealth generated by companies, in largepart asRead More →

Where were the Thomas Cook shareholders? This is a question that we think deserves further exploration following the liquidation of the travel firm, which leaves thousands of workers facing redundancy. Because one of the odd things to emerge from the company’s failure is that the deeper it got into trouble, the less likely shareholders were to use their legal rights to intervene. If we look back at the company’s February 2017 AGM the proportion of the issued share capital that was voted was just under 84%. At the February 2018 AGM it dropped back to 82%. By this February’s AGM that number fell further toRead More →

Buried in AGM results last week is the amazing news that almost 95% of independent shareholders voted against Benzion Freshwater, the chair and chief executive of property investment business Daejan Holdings. The company is a rare example of an all-male board, something that is an increasing point of friction with investors, and it looks as though last week patience ran out. The company is tightly controlled with a free float of barely 20%. As such it has to report the votes on its independent NEDs twice once with all shareholder votes counted and again with just minority shareholders voting. From this we can see theRead More →

It’s obviously the week for low-cost specialists with a controversial chief executives and reputations for poor governance and working conditions. Also back in the news is Ryanair. This time it’s because of a worker-driven governance demand: representation at board level. Last week the union umbrella groups the International Transport Workers Federation (ITF) and the European Transport Workers Federation (ETF) wrote to Ryanair CEO Michael O’ Leary. The letter from the two groups, which have particularly strong links to Ryanair’s cabin crew, acknowledges progress made over the past two years but highlights some concerns over the new group structure. Most significantly, it calls on the companyRead More →

Elliott Advisors is on the warpath again. Last week it was reported that the activist firm had ’grabbed 5% of the shares’ of over 50s travel and insurance group Saga Plc. According to reports, this heralded a move top push for options including break up of the business. So it’s just the latest example of shareholder activism? Well, not quite. If you look closely at filings triggered by Elliott it’s not clear whether it actually holds any Saga shares. If you read the TR1 notice issued by Saga on 17 July (relating to thresholds being crossed on 12 July) the percentage of voting rights attachedRead More →