News & Press: IoDSA in the Press

Proposal to skip votes of directors unpopular

Tuesday, 12 February 2013  
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IoD calls for executives not to be subjected to rotation

IN A MOVE that is likely to be challenged by institutional investors, the Institute of Directors (IoD) has recommended that executive directors should not be subjected to re-election by rotation. The issue of whether the status of executive directors should be put to a shareholder vote on a rotational basis has been highlighted because of the May deadline for companies to secure shareholder support for their new memorandums of incorporation (tools). The Mol, which is essentially the constitution of a company, replaces the articles of association and memorandum of association required by the old Companies Act. At present, listed companies put forward a third of their directors for re-election each year. As a result of increasing activism by institutional shareholders, many companies require that each executive director as well as non-executive director is put forward for reelection every three years. Read more...