It doesn’t often happen but in the case of Premier Group’s annual general meeting, it has. Each of the three parties to a spat over the conduct of that AGM — the company Premier, the activist shareholder Active Share and the regulator the Companies and Intellectual Properties Commission (CIPC) — has emerged with their reputation enhanced and all seem reasonably happy with the outcome. Full marks to all three.
So, here’s what happened. In early September Premier made JSE history by conducting the briefest AGM since the implementation of the ‘new’ Companies Act in 2011. It was just 18 minutes long, which, considering all the box-ticking requirements attached to an AGM these days, is a considerable feat.
Inevitably someone ended up paying for that brevity. And, as inevitably, it was a small shareholder.
The conduct of the meeting drove a large bus through section 63(2) of the Companies Act, which requires that all shareholders participating in a meeting are able to communicate reasonably effectively. It’s a section of the Act that regularly has buses barreling through it, even by companies claiming first class governance credentials. The Companies and Intellectual Property Commission (CIPC) was sufficiently concerned about this obligation being ignored that it went to the unusual lengths of issuing a Guideline in 2024 reminding boards of their responsibility. (It was prompted to take this action by a second activist shareholder, Just Share.)
Presumably the Premier board didn’t get sight of the CIPC guideline.
During the AGM, the board answered questions received ahead of the meeting, but there was no ability for follow-up discussion and limited technical capacity for those attending electronically to ask questions during the meeting.
A matter of seconds
Having promptly dealt with the questions that had been received prior to the session, the chairman went on to inform shareholders that all of the resolutions had been seconded and they should now vote on the resolutions. Here’s where it became laughable: seconds later the chairman declared the voting complete and, shortly after, brought the meeting to a close.
Active Shareholders’ agent attending the meeting, Rod Bulman told the FM he was given a matter of seconds to vote on all the resolutions put to the meeting; an impossible task. So, his votes went unrecorded.
Bulman, who had spent considerable time preparing for the event, in the hope of getting some clarity on Premier’s recent decision to shut the Tulbagh Fruit Canning Factory, was understandably irritated.
He fired off a detailed complaint to CIPC commissioner Rory Voller; not holding out much hope when he received an automated response directing him to a CIPC general complaints address.
Remarkably, within a week or so an official from CIPC contacted Bulman. “He was extremely receptive and knowledgeable,” said Bulman. After a reasonably lengthy discussion the CIPC official told Bulman there would be no investigation, but the Commission would contact Premier.
A week or so later Bulman received a three-page letter co-signed by Premier’s chairman and CEO Iaan van Heerden and Kobus Gertenbach respectively.
“Premier values constructive shareholder engagement and appreciates you taking the time to share your concerns. We welcome the opportunity to respond to the matters raised and to consider how we can improve the experience for shareholders attending future meetings,” said Van Heerden and Gertenbach, going on to explain why they believed they had done everything by the book.
They acknowledged the various difficulties Bulman had engaging with the meeting, noting: “We will review these aspects of the meeting platform with Computershare and consider what functionality or arrangements may be appropriate for future meetings,” said the two directors.
As for questions and answers, again the Premier directors said they believed they’d handled it appropriately. “We nevertheless acknowledge your feedback that the responses were delivered too quickly to allow for meaningful note-taking or follow-up engagement, and that opportunities to ask additional questions were not sufficiently clear.” More reviewing to improve the shareholder experience.
Then there was the speed-voting. That will also be subjected to a review.
“Premier did not intend to restrict any shareholder’s ability to exercise their voting rights,” said Van Heerden and Gertenbach. They acknowledged the importance of ensuring that all shareholders have sufficient time to cast their votes and said they will review the voting arrangements with Computershare ahead of future meetings.
Well done to Premier, who presumably knows Bulman and his Active Share colleagues will be watching closely.
This is how progress is achieved. It’s just worrying that it relies on small, poorly-resourced players like Active Share and Just Share, rather than our well-funded but silent institutional fund managers.
