Following the results of yesterday’s Maven Renovar VCT AGM, shareholders rejected both the reappointment of all Board members and their proposal to change the investment strategy.
The Board should respect the vote; it’s clear their decision to change the VCT manager without shareholder approval has provoked a backlash: shareholders have responded in kind by voting to remove the Board and reject their proposal to change the investment policy. This is the first time in VCT history that shareholders have voted to sack a Board.
It is not in the spirit of the vote for the Board – remaining in post until the next General Meeting – to conduct an “outreach exercise”* to “engage with those shareholders who voted against the resolutions”. This smacks of an undemocratic attempt to rerun the vote until the “correct”* result is achieved; nor is it honourable of the Board to brand those who voted against their resolutions as merely the “close friends and family”* of the former manager, Amati Global Investors (AGI); nor to dismiss others outside this category as “those encouraged to vote alongside AGI”*. Moreover, by painting the outcome as “the voices of smaller retail shareholders”* being “drowned out”* by larger investors. Ultimately, if the Board wanted to avoid a shareholder backlash, they should have held a vote on the change of manager.
Comment provided by Peter Hicks, Research Analyst at Chelsea Financial Services.
