Shareholders should back only qualified directors
They need to exercise more informed voting, otherwise the quality of boards and corporate governance is likely to deteriorate.
RECENTLY, I went to a rather sparsely attended AGM. Before the voting for the election of the directors began, I asked the chairman a number of questions.
The board has four independent directors, three of whom (including the chairman) having served between 10 and 12 years; the board and committees are relatively inactive based on formal meetings; the company pays additional fees for chairs and members of each committee, including for an executive committee that had no formal meetings during the past year; director fees appear on the high side relative to similar-sized companies and based on the number of directors and how active the board and committees are; and it has a wholly non-executive board of directors. I did not have deep concerns about the company but wanted to understand the board's rationale.
The chairman and another independent director were cordial in answering my questions. However, I was not fully convinced that the board was paying sufficient attention to board renewal and did not feel there was sufficient rationale provided for certain resolutions. I voted against some resolutions. To me, it was the company's responsibility to provide sufficient justification for shareholders to support a resolution.
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Columns
‘Competition for talent’ a poor excuse to keep key executives’ pay under wraps
OCBC should put its properties into a Reit and distribute the trust’s units to shareholders
Why a stronger US dollar is dangerous
An overstimulated US economy is asking for trouble
Too many property agents? Cap commissions on home sales
Time to study broadening of private market access