NGO firm to take on Lewis board
Active Shareholder, a company recently established by a group of nongovernmental organisations to actively manage the voting of their share portfolios, is taking a stand on corporate governance at Lewis Stores.
The company, which will focus on social and governance policies at JSE-listed companies, is voting against the re-election of several of Lewis’s longstanding directors at Tuesday’s annual general meeting.
It is also voting against the group’s remuneration policy.
Executive director Sahra Ryklief said Active’s mandate was to engage on behalf of its shareholding clients, with listed companies on their effect on society. “The Lewis holding was something of a legacy and was instrumental in our realisation that we had to become active.
“There may be a point at which it becomes impossible to hold the share — we shall see where we get to with Lewis,”
said Ryklief. The NGO-aligned activist investor is voting in support of only four of the 14 resolutions put to Lewis shareholders. It is particularly concerned that the majority of Lewis’s directors have been on the board for 10 or more years. Daphne Motsepe and Adheera Bodasing, appointed in 2017, are the only new board members.
Active Shareholder is keen to see evidence of more independence in the audit committee, which comprises only longstanding directors, one of whom is a former Lewis CEO.
“You don’t need the backdrop of the KPMG debacle to realise the critical need for audit committee independence,” said Ryklief. It was voting against the reappointment of David Nurek as a director. “We are relieved he has stepped down as chairman, but in the context of his appointment to head the audit committee, even on a temporary basis, we are concerned about his independence. He has been on the board since 2004,” Ryklief said.
Active Shareholder is also voting against Hilton Saven’s appointment as a member of the audit committee. Saven joined the board in 2004 and was chairman of the audit committee. He has swapped roles with Nurek. He is chairman of the board and is hoping to be elected a member of the audit committee, contrary to good corporate governance. Although described as an independent director, Saven has been on the Lewis board for 13 years.
Active Shareholder was voting against the remuneration report because there were insufficient details about the policy and the members of the remuneration committee.
Ryklief said the NGOs had decided to become engaged in the management of their portfolios because they were concerned about evidence of unacceptable corporate governance at JSE-listed companies.