Susman wins vote as Woolies chairman

Susman wins vote as Woolies chairman

RETAILER NEWS

IOL Business - Nov 18th 2011, 08:45

about 15.8 percent of Woolworths shareholders voted against the re-election, and automatic appointment to chairman, of the group’s former chief executive, Simon Susman. However, the ordinary resolution was easily carried with 83.9 percent voting in support of Susman’s appointment. 

While in no danger of not securing the necessary approval from shareholders, the 15.8 percent vote against Susman’s election indicated some shareholder concern.

All of the other resolutions proposed at yesterday’s annual general meeting had received the support of 99 percent, on average, of the votes cast.

During the meeting outgoing chairman Buddy Hawton addressed concerns that had been raised in the meeting about Susman’s appointment to the position of chairman, which because of his long association with the company as a chief executive, contravenes good corporate governance guidelines. Susman retired from the position of chief executive a year ago and in terms of governance recommendations should have waited three years before becoming chairman.

Hawton said that during the past year the board had observed Susman in his role as a non-executive director and by August had decided that he had distanced himself from an executive role and was also capable of playing the role of non-independent chairman.

“We also decided we would appoint a lead independent director who will handle any conflicts of interest,” Hawton said. The lead independent director is Tom Boardman.

Hawton said that the decision to appoint Susman as the chairman was not an easy one “because it generally goes against good governance principles”. He added: “However, we felt that Simon (Susman) had attributes that were very very important.”

These attributes, he said, were a sound understanding of the international retail business and a wealth of contacts, he was respected an enjoyed “high standing” with many government departments and he had an understanding of the Woolworths brand.

Shareholders in attendance at the meeting were in support of Susman’s appointment, with one pointing out that, given Susman and his family were “enormous shareholders” in the company, he would be better placed than anyone else to keep an eye on the board.

However, governance commentators contend that it is precisely because of vested interests that boards are encouraged to appoint independent chairmen.

A trading update released after the meeting noted that sales for the first 20 weeks of financial 2012 rose by 10.3 percent over the comparable period in 2011. This increase in the 20 weeks to November 13 was partly attributable to the increase in store numbers as the sales in comparable stores increased by 7 percent.

“Clothing sales in South Africa grew by 9.5 percent with a price movement of 6.6 percent. Sales in comparable stores grew by 5.9 percent.”

The group’s chief executive, Ian Moir, whose contract has been extended to December 2014, said he believed the business was well-positioned for the crucial Christmas period. “November and December are when we make most of our money,” Moir said.

The shares lost 1.81 percent to R40.12 on the JSE yesterday.