Buhlmann's Corner

It’s voting time –some come, some go

So, is voting in a general election the same as voting in a general meeting? The answer is, by and large, yes, the only differences being that you don’t get the results of general elections several days beforehand, and votes are cast personally or, failing that, by post. It has to to be said, though, that the majority of stakeholder votes end up adrift, lost on the way. How can that be? It can be and it is, because someone, somewhere along the line changes the procedure, or very simply put, because nobody really knows how the custody chain system works.

After 21 hours and 19 minutes, Ted Cruz, the senator from Texas was bodily removed from the rostrum after 60 fellow senators passed a vote of protest. He had vowed to carry on his fillibustering speech against Obamacare for as long as his legs would hold him up. Compared to this, aren’t the three minute slots allowed to shareholders in general meetings in Germany a bit of a joke? Is the only reason behind the dramatic slump in the number of votes cast during general meetings because some judge is applying a law that has long been known to be on the statute books? The fact is that every attempt to increase shareholder attendance has tended to come undone. Particularly droll, if it can be so defined, is the example of PUMA. When I asked for a copy of the annual report, what I got was a kind e-mail saying that they would assuredly send me a hard copy of the report in German and that the document would be available from ... which was the day of the general meeting. The revelation that the promise was a slip-up only heightened its absurdity; first you vote then you read what you’re supposed to be voting about. By contrast to company executives, these days ever less constrained by national boundaries, shareholders’ votes tend to stay at home, and when they do manage to cross borders, they are to all intents at the beck and call of management who can use them (almost) as they wish. There is, however, a counter tendency, dated 2013 the year of the lowest ever attendance. The shareholders of GSW had understood the importance and the need to attend the meeting in person. The lady from furthest afar had travelled 20,500 kilometres to come to Berlin from Sao Paolo to be part of the sshareholders’ revolt, the only way she could get a voting receipt to take back to her hedge fund. (VIP could have performed the service for her at a much lower cost).

I am looking forward to the outcome of the second post-IPO general meeting of Facebook. At the first, which took place in June 2013 (AGMagenda.com), the company worth had been halved. Since then, however, it has more than doubled, all without corporate governance (one share one vote) either in Facebook or in the Chinese ALIBABA which having shunned good corporate governance will not be quoted on its home stock market in the PRC but in the US,  the country where Corporate Governance first saw the light.

I’m beginning to think that Americans lead the field in consequentiality, if their way of designating the CEO of Nokia is anything to go by. He weaves business in with the company he started out with and where he is now coming back to. My question is why should Nokia pay him 19 million Euros for the pleasure since his tenure has led the Finnish company back to where it started – manufacturing Wellington boots. The same thing has happened extensively to European airline companies – Air France, IAG international airlines group (former: British Airways) and Deutsche Lufthansa. There is no lack of cross border executives – Linde, RWE, Roche and Diageo are fine examples. So why shouldn’t they be followed by shareholders’ votes? An interesting case is brewing for 2014. Will Cevian succeed in bringing shareholders’ votes to bear on the Daimler supervisory board? In the meantime, some people are already packing their bags for the cross border journey to cast their votes, and the discussion table is set in many countries.