At the LIC AGM this week the resolution to streamline the company shareholders’ council received 83% support from those who voted, while the resolution to put a “money maker” share trade facilitator in place received 81.5% support. Under LIC constitution resolutions require 75% support to be passed.
The resolution’s changes also included proposals for a smaller board, equal weighting of directors across North and South Islands and streamlining of elections.
The resolution to disband the shareholders council had been met with some concern by past council members, including past chairwoman Jenny Morrison.
She told Farmers Weekly her greatest concern was streamlining down to a smaller reference group would see a loss of the council’s constitutionally granted powers to keep LIC board focused on the company’s key strategies and goals (see Farmers Weekly October 12).
“I must admit I am surprised the decision was passed by the margin that it was. Obviously, the shareholders have spoken and what will be will be.”
She said she remained concerned over what checks and balances would remain in place for LIC shareholders at LIC in wake of the decision.
“I think shareholder councils have struggled to find their place, whether they be for Fonterra or for LIC. But they have to work on a trust basis, and unless you have a totally open relationship and level of trust between the board and the council, it is difficult.”
However, if a reference group enabled a more effective level of communication and trust between the two, then it may be the way forward, she said.
LIC board chairman Murray King said the changes would establish an efficient and effective governance structure for the future that was truly representative of the company’s shareholder base.
“We believe the new shareholder reference group will be more hands on and focused and deliver improved shareholder engagement, better value for money and most importantly ensure shareholder voices are heard at an early stage where they are able to have a meaningful impact.”
The second resolution to bring in a “money maker” for aid LIC share trading aimed to create price stability and increase liquidity by ensuring consistent two -way quotes in LIC shares traded on NZX.
