As most people will be aware, last month the non-executive chairman of Sports Direct Keith Hellawell failed to receive the support of a majority of non-insider shareholders (though he received the support of the majority of all shareholders, including Mike Ashley). This vote was clearly driven by corporate governance concerns.
Because he is designated as an independent director, this triggers a re-run of his election. This time he faces a straightforward for/against vote, and with Ashley's backing will clear it easily. But by triggering the vote re-run (for the first time at a UK PLC) shareholders have given their engagement force, and increased board accountability.
Last week, the non-executive chairman of Sky PLC James Murdoch failed to receive the support of a majority of non-insider shareholders (though he received the support of the majority of all shareholders, including 21st Century Fox). This vote was also clearly driven by corporate governance concerns.
However, because Murdoch is NOT designated as an independent director, there will be no re-run of his election.
A lot of companies with controlling shareholders can be dismissive of minority shareholders' concerns about governance. Being a bit cynical, if I was on the board of such a company looking at these two examples, I'm not sure I would designate my chair as independent. What's the upside?
I think this regime may need a tweak or two...
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