Hundred Group says no to annual chairmen elections
FDs fear governance proposals will benefit only short-term investors looking for quick return
Sir Christopher Hogg
The Hundred Group of finance directors has repeated its opposition to
introducing annual elections for board chairmen because it will give too much
power to speculative shareholders.
The measures was proposed by the Financial Reporting Council in December when
it published its repsonse to the Walker report on governance.
The Hundred Group, which consists largely of FTSE100 finance directors, said
in a letter to FRC chairman Sir Christopher Hogg: “We would like to re-iterate
that we believe such a step is unnecessary and may fuel short-term behaviour in
existing and potential shareholders.
“There have been instances in recent times of shareholders behaviour which is
not in the best interests of the company as a whole – individuals and
institutions driven by short term profit rather than considering the longer term
prospects of the company.”
Written by Peter Williams, finance director at the Daily Mail and General
trust as well on the investor relations committee of the Hundred Group, the
letter goes on: “By mandating annual re-election of either the chairman or the
full board, we fear that performance time horizons will be measured more harshly
and that too much control is placed in the hands of speculative investors.”