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Manchester United's float and the issue of shareholder voting rights

posted by Mark Goyder on September 2, 2011

So Manchester United are to float 30% of their shares on the Singapore Stock Exchange to capitalise on Asian interest in the club.

But they are going to operate a dual share structure. For every voting share there will be a non-voting share. You can invest, but they don’t want your shareholding to give you much control.

In the UK we don’t like dual share structures. If you invest you should be entitled to have a vote in electing the board and deciding the fate of the company.

And yet….while the tidiness of one shareholder one vote may be fair, it does not do much for stewardship. Companies need the certainty of having some constant, solid blocs of ownership. Too many shareholders owning a handful of shares do not feel it is worth the bother to get involved. If no-one gets involved the risk is the board do what they like, pay themselves what they like, and generally commit the three deadly sins of corporate governance which I once described as Greed, Sloth and Fear (of market reaction)

Issue(s): Tomorrow's Stewardship

Tag(s): Manchester United , Stewardhip , Tomorrow's Stewardship

Stewardship Lessons from News Corp (part two)

posted by Mark Goyder on July 22, 2011

The radio was on in every room as my wife and I installed ourselves in our new home yesterday. I was moving house as the select committee interview of Rupert Murdoch and his son James unfolded.

Apart from the foam pie commentators today are concentrating on who knew what when.

Most of them are missing the two main points which screamed out from the hearing, especially in the testimony of Rupert Murdoch.

As leader and manager it is your business to know how people are behaving in your business. Even when all is going well. It is your business to check. And when you get clear warnings that things are going wrong, it is your business to investigate. If you delegate that to others you are abdicating your leadership. And if people don’t of their own accord tell you when things are going wrong, you have set the wrong tone.

Issue(s): Tomorrow's Stewardship , Why Stewardship Matters , Stewardship Campaign

Tag(s): News Corp , Stewardship , Stewardship Campaign , Why Stewardship Matters

Stewardship Lessons from NewsCorp

posted by Mark Goyder on July 13, 2011

In 2002 I wrote “Lessons from Enron”. It was story of power, fear and greed by the people at the top of the company. The non-executives who were there to hold them to account failed to restrain it.

People close to the operation knew there was much that was smelly. Brave whistle-blowers tried to draw attention to the problems but were slapped down.

Does any of this sound familiar this week?

There are differences, of course.Enron was listed company with dispersed shareholders. News Corp is a hybrid, with listed status but family control through preferential voting structures.

In Enron the performance pressures led to fraud and corruption. In News Corp they led journalists and executives to break the law, invade personal privacy, ignore the industry’s codes of practice and pay police for information. How much their managers then covered up this wrongdoing is still emerging.

Issue(s): Tomorrow's Stewardship , Why Stewardship Matters , Stewardship Campaign

Tag(s): Lessons form Enron , Stewardship , Why Stewardship Matters

Passivity no longer an option

posted by Mark Goyder on July 6, 2011

I am reading more and more stories about listed companies that are taking shareholders for a ride.

Last month the story was ENRC (Eurasian Natural Resources Corporation).

This is a big company with majority owners from Kazakhstan which was listed and immediately admitted to the FTSE 100.

The minute this happens ordinary punters with their tracker funds or just their life insurance policies are dependent on the decisions made by the board.

Now respected independent directors Sir Richard Sykes (who chaired the Tomorrow’s Company restoring Trust inquiry 2003-4) and Ken Olisa have resigned, because they are not happy that the majority owners are treating minority shareholders like you or me fairly.

But we are powerless because the authorities have let them list here without imposing more stringent conditions.

Issue(s): Tomorrow's Stewardship

Tag(s): Stewardship , Stewardship Manifesto , The Financial Times , Tomorrow's Stewardship

The Summer of Stewardship

posted by Mark Goyder on June 24, 2011

So the summer of stewardship is under way. We have launched our new report ‘Why Stewardship Matters’ which shows how the ordinary person can start to insist on stewardship from the people who supply financial services.

Issue(s): Family Business Stewardship , Tomorrow's Stewardship , Why Stewardship Matters , Stewardship Campaign

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