The Ousting of a Board Chair

George Steer and Attracta Mooney of the Financial Times covered the results of the activism campaign launched by asset manager Phoenix against Dignity plc. At the general meeting, Phoenix (a holder of c.30% of Dignity) sought to remove the Board Chair and appoint one candidate.

55% of shareholders that voted backed the removal of the current Board Chair, who was appointed in September 2019, with 61% supporting the appointment of Gary Channon, chief investment officer at Phoenix Asset Management Partners.

The ousting of a chair at a shareholder meeting is rare in the UK. Since 2016, only a handful of UK companies have been subject to resolutions to remove the chair, including Petropavlovsk last year, according to SquareWell. A company that engages with its shareholders will know if there are concerns with its board leadership, which is why in most cases boards will proactively make changes themselves rather than face negative publicity.

Since 2016, a total of 52 director election proposals failed at 17 UK companies. Of these, only six of the failed proposals were to elect a Chair (including at Debenhams and Petropavlovsk). Shareholder proposals to remove a Chair is even less common, with only four shareholder proposals to remove board chairs approved since 2016 (CPPGroup plc, InfraStrata Plc, JKX Oil & Gas Plc, and Petropavlovsk Plc).

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