Boardroom a tad yesteryear …
PROXY VOTING: FOR A FASHION GROUP, ITS APPROACH TO GOVERNANCE SEEMS OFF-TREND
Foschini group’s board has been dominated by white males for decades.
For a company that seems to thrive in the world of fashion, its approach to governance seems remarkably old-fashioned – the boardroom profile of The Foschini Group (TFG) is more like something out of the 1980s than the 21st Century.
In its proxy voting note ahead of today’s AGM, non-government organisation Active Shareholder points out that not only has the board been dominated by white males for decades but that during financial 2020 the two additions to the board were both white and male.
“Although the social and ethics committee report talks of transformation, it makes no mention of the fact that the board is not transformed,” said Active Shareholder. “These appointments may have been justified, but the social and ethics committee should have engaged with the issue.”
Former high-profile banker Colin Coleman and former chief executive Doug Murray were the two new appointments.
Active Shareholder, which advises labour and community-based investors on voting at shareholder meetings, isn’t overly concerned about the two new appointments. Where it sees things getting totally out of hand is the board’s remarkably loose definition of “independent”. On TFG’s own interpretation, the only director who is described as not independent is the former CEO.
Tagged as “independent” in the group’s latest integrated annual report are Michael Lewis, Graham Davin, Sam Abrahams, Fatima Abrahams, David Friedland, Eddy Oblowitz, Nomahlubi Simamane and Ronnie Stein.
The King IV code says the independence of a member who has served for longer than nine years should be assessed each year to ensure they are still independent. That assessment appears to involve nothing more than asking the director if they have applied their mind honestly on all matters presented to the board and have made decisions in the best interests of the company.
Only such a pointlessly lax assessment could regard Lewis as independent. He was appointed to the board, which his father previously controlled, back in 1989. Sam Abrahams has been on the board for 22 years and Fatima Abrahams for 17. Simamane has been a TFG director for 11 years and Oblowitz for 10.
For some reason the 2020 integrated annual report describes Stein as being appointed to the board in 2015 and therefore as being independent. But Active Shareholder points out that the group’s 2014 annual report states that Stein was appointed to the board in 1999. This means Coleman, Friedland and Tumi Makgabo-Fiskerstrand are the only directors of unquestionable independence.
Active Shareholder’s opposition may not achieve much given that as far back as 2015, the Public Investment Corporation, then with a 16.5% stake in the company, voted against the re-election of Sam Abrahams because of his lack of independence. But at least investors can’t say they weren’t warned.