“Provision E.1.1. of the Corporate Governance Code states inter alia that:
The chairman should discuss governance and strategy with major Shareholders…
The senior independent director should attend sufficient meetings with a range of major shareholders to listen to their views in order to help develop a balanced understanding of the issues and concerns of major shareholders.
Our chairman does arrange to meet major shareholders to talk about governance and strategy. The SID does not, though he is available should shareholders wish to discuss any concerns they may have.
How do listed companies comply with this Code provision in respect of the SID?”
Companies can only comply if their investors allow them to do so. In most instances there is ambivalence on the part of institutional shareholders in this area unless a major governance point arises.
(FTSE250 company)
Our SID has not to date met with investors despite, until recently also being the RemCo Chair. He is available to investors if they wish, but even our our Chair struggles to get investors to discuss corporate governance with him due to total apathy on their part.
(FTSE100 company)
When our Chairman is seeing investors, he arranges to take our SID with him on an appropriate number of occasions to cover about 30% of our institutional shareholders – which we feel covers off the “sufficient meetings” requirement. It also helps to have a second person providing feedback at subsequent Board meetings.
(FTSE250 company)
We are also grappling with this particular issue as our SID does not currently meet with shareholders and is not the Remuneration Committee Chair. Does anyone have any other suggestions on how we could comply with this provision?
(FTSE100 company)
Our SID has always been the RemCo chairman and meets shareholders in this role regularly. There are other requests to meet the SID and we accommodate as far as able. The SID also, along with the Board, receives the results of investor audits, as well as hearing a different perspective through presentations from the company’s broker.
In short, we feel the SID listens sufficiently and if investors / shareholders want him to listen more, they should be more proactive.
(FTSE100 company)
Our SID is also the Chairman of the RemCom therefore he discharges this responsibility by way of meeting major shareholders on remuneration matters and takes the opportunity to ask about any other issues.
(FTSE100 company)
The requirement to discharge this Code obligation should be included in the SID’s Terms of Reference with the consent of the Board and the SID’s performance review with the Chairman should measure his success in this regard.
Opportunities arise each year to ask for a discussion with major shareholders, usually around burning fashionable issues such as gender representation on the board, executive remuneration policy adjustments etc. In most small plcs the SID will only have to see the 3-4 fund/family trust managers whose investments account for 30% of the business. Make it clear that lines of communication are open directly to the SID once the first contact has been made.
(FTSE SmallCap company)