UK - A shareholder resolution put forward by the Local Authority Pension Fund Forum (LAPFF) calling for an independent chair of the board of Marks & Spencer (M&S) was backed by just 38% of shareholders.

The LAPFF, which represents 49 public sector pension funds with combined assets of over £75bn (€87.14bn), tabled the resolution in March following the continued failure by the firm to split the roles of chairman and chief executive, as stated in the UK Code of Combined Business. (See earlier IPE article: LAPFF adds pressure for independent M&S chair)

Sir Stuart Rose was appointed to the new role of executive chairman in 2008 - combining both positions - but M&S compromised over shareholder concerns and agreed to allow him to face re-election every year as well as have successors in place for both positions by 2011.

The LAPFF revealed in June that its resolution for an independent chair to be appointed from July 2010 - a year earlier than M&S plan - was supported by a number of proxy voting firms and had been 'flagged' by organisations such as the Association of British Insurers (ABI). (See earlier IPE article: LAPFF M&S resolution garners more support)

Howeverm at M&S' annual general meeting (AGM) yesterday, the resolution for an independent chair was supported by just 37.7% of shareholders, while just 8.62% actively opposed the re-election of Rose to his role.

The figure is still higher than the 22% that opposed Rose's original election to the combined role in July 2008, and the organisation stated: "Given the scale of the vote at the Marks and Spencer AGM today on resolution 16, LAPFF are looking forward to an immediate dialogue with the company about how it plans to respond." (See earlier IPE article: LAPFF issues deadline for M&S governance)
 
The LAPFF confirmed it would also be talking to other supporters of the resolution to "listen to their views on the way forward as it highlighted it had filed the resolution on behalf of the market, in support of the integrity of the Combined Code".
 
It added: "This is a significant day for shareholder engagement. Sometimes shareholders need to step up and be public with their concerns and use their voting rights effectively. We need to get past the idea that meetings behind closed doors are always the answer. Therefore we hope the result is registered in boardrooms across the UK."

However a spokesperson from M&S said: "Resolution 16 received considerably less than half the vote - the Board sees this as endorsement of its proposed succession process and will proceed as planned, whilst continuing to listen to its shareholders' views."

Have Your Say:

Sarah Wilson, chief executive of Manifest, a proxy voting agency, said: "While the resolution didn't 'legally' succeed it was actually a resoundingly positive success in terms of shareholder resolutions - in fact double the previous level of support."

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email nyree.stewart@ipe.com

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